US Sets New Records for Trade Imbalance

16 March 2007

WASHINGTON DC: The US trade deficit rose for a fifth consecutive year in 2006, according to latest figures from the Commerce Department. The current account imbalance jumped 8.2% to $856.7 billion (€648.7bn; £442.8bn), representing a record 6.5% of the total economy.

However, the deficit shrank by 14.6% to $195.8bn in the fourth quarter, the smallest quarterly imbalance since the summer of 2005. The drop reflected a decline in oil prices during the period.

Many economists believe the US will start to show gradual improvement this year as long as oil prices are kept in check.

Comments Nigel Gault from financial analysts Global Insight: "The trends are becoming favourable. Robust export growth, and some cooling in import growth, should keep the deficit down this year."

Data sourced from BBC Online; additional content by WARC staff