US current account narrows unexpectedly
The US current account deficit narrowed unexpectedly in the final three months of 2003 to $127.5bn, but the improvement wasn't enough to prevent an annual record of $541.8bn, US government data showed today.
Many economists had expected the current account deficit to expand to $136.3bn in the quarter from $135.3bn in the previous quarter.
Foreigners' appetite for US assets of all kinds increased in the fourth quarter and in the year.
Foreign capital inflows increased $232bn in the fourth quarter and $856.7bn for the year, offset by capital outflows of $51.1bn in the quarter and $277.7bn for the year.
The gap in trade of goods and services widened to $122.9bn in the fourth quarter from $121.6bn. For the year, the trade gap rose to a record $490.2bn from $418bn in 2002.
The current account deficit is the broadest measure of the US's financial balance with the rest of the world.
Recently it has been blamed for weakening the dollar against other currencies, as Americans import more than they export and borrow from the rest of the world to make up for the shortfall in their domestic savings.
