U.S. Trade Deficit Widest in 3 Years
(The Associated Press)
Europe‘s debt crisis likely to drag on U.S. exports
A slight drop in exports and a rise in imports widened the broadest measure of the U.S. trade deficit at the end of last year. The increase pushed the gap to its widest point in three years. The Commerce Department said Wednesday that the current account trade deficit increased 15.3% in the October-December quarter, to $124.1 billion.
A higher trade deficit acts as a drag on growth. It means more goods and services are being purchased from overseas, while U.S. companies are making fewer sales overseas.
Exports decreased slightly to $380.4 billion, in part because of a drop in overseas demand for U.S. airline tickets. Imports ticked up to $566.7 billion. The increase was partly driven by increased purchases of imported airplanes.
For the year, the current account deficit rose 0.6% to $473.4 billion, the largest imbalance since 2008. Read more here.
Date: March 16, 2012