WASHINGTON (AP) -- The U.S. current account deficit likely widened in the final three months of last year.
Economists forecast that the deficit increased to $114 billion in the October-December quarter, according to a survey by FactSet. The Commerce Department will release the report at 8:30 a.m. EDT Thursday.
In the July-September quarter, the current account deficit shrank to $107.5 billion, down 9 percent from the second quarter imbalance of $118.1 billion. The third quarter deficit was the smallest trade gap since the final three months of 2010.
The current account is the broadest gauge of trade. It tracks not only the sale of goods and services but also investment flows. Economists watch the current account because it shows how much the United States must borrow from foreigners.
Many economists believe the current account deficit will widen slightly in 2013 as a small pickup in global growth helps U.S. export sales but these gains are outpaced by rising demand in the United States for imports.
The current account deficit hit an all-time high of $800.6 billion in 2006. It then shrank after a deep recession reduced U.S. demand for foreign goods by a greater amount that U.S. export sales diminished.
The trade deficit widened again after the U.S. recession ended in June 2009.
The narrowing of the deficit in the third quarter left it at an equivalent of 2.7 percent of the total economy, as measured by the gross domestic product. That was down from 3 percent in the second quarter and was the smallest percent of GDP since the spring of 2009.
The overall economy grew at a scant annual rate of 0.1 percent in the October-December quarter. But recent signs of strength have many economists boosting their forecasts for growth in the current January-March quarter to around 2 percent or better.
- Politics & Government