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NewsFlash: March 14, 2007

Falling oil imports lessens US deficit

The good news is that the U.S. current account (the broadest measure of the U.S. balance of trade in goods, services, and payments to the rest of the world) fell by $34 billion this quarter, according to analysis in today’s International Picture by EPI economist Robert Scott.  This improvement was mostly caused by a $21 billion fall in U.S. oil imports.

The bad news is that the current account deficit for just this past quarter is still $196 billion.  To give some perspective on such a large debt, last year the United States consumed 6.5 percent more than it produced and borrowed more than $3 billion every business day – mostly from foreign governments – to finance its $857 billion account deficit for the year.

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