*EPF507 06/18/2004
U.S. Current Account Deficit Reaches Record $145 Billion
(Reflects growing gap between imports, exports, Commerce says) (420)

Washington -- The deficit in the U.S. current account, the broadest measure of U.S. transactions with the rest of the world, reached a new record in the first three months of 2004 due to the growing gap between imports and exports.

The U.S. Department of Commerce reported June 18 that the deficit jumped to $144.9 billion in the first quarter of 2004 from a revised figure of $127 billion for the last three months of 2003.

The overall deficit reflected a $150.8 billion deficit on goods, up from $139.4 billion for the last quarter of 2003, and a $13.8 billion surplus on services, down slightly from $13.9 billion for the earlier quarter.

The gap also reflected a decrease in the income surplus to $12.7 billion from $16.2 billion, Commerce said, noting that the change was largely due to U.S. payments on direct investments.

Official foreign purchases of U.S. assets rose $125.2 billion in the first quarter following an increase of $83.7 billion in the fourth quarter. Total foreign-owned assets jumped $447.6 billion in the first quarter, after a $230.3 billion rise in the fourth.

U.S.-owned assets abroad climbed $289.3 billion, after a $61.6 gain in the previous quarter, the report showed.

The U.S. dollar fell 3 percent in the first quarter on a trade-weighted basis against a group of seven major currencies, the Commerce Department said, compared to previously reported decline of 12 percent for all of 2003.

Following are some key figures:

U.S. CURRENT ACCOUNT
Millions of dollars, seasonally adjusted

year year 4th qtr 1st qtr
2002 2003 2003 2004
BALANCE ON:
Merchandise trade -482,895 -547,552 -139,441 -150,768
Services 61,160 51,044 13,947 13,837
Income 7,173 33,279 16,151 12,675
Unilateral transfers -59,382 -67,439 -17,617 -20,623
-------- ------- ------- -------
Current account -473,944 -530,668 -126,960 -144,879

U.S. CAPITAL AND FINANCIAL ACCOUNT
Millions of dollars, seasonally adjusted

year year 4th qtr 1st qtr
2002 2003 2003 2004
NET CHANGE IN:
Capital account
transactions -1,260 -3,079 -300 -344
U.S. assets abroad
(an increase in
capital outflow
is -) -198,014 -238,414 -61,647 -289,293
Foreign assets in U.S.
(an increase in
capital inflow
is +) 768,246 829,173 230,311 447,594

(Distributed by the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)

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