The deficit in the broadest measure of US trade rose in the first quarter to the highest point in more than a year as rising global oil prices and a rebounding economy pushed up imports sharply. The Commerce Department said Thursday that the deficit in the current account increased to $109 billion in the January-March period, compared to a revised $100.9 billion in the fourth quarter of last year. The current account deficit narrowed to $378.4 billion in 2009, down a sharp 43.4 percent from the 2008 deficit of $668.9 billion. The big drop reflected a deep recession in the United States, which cut demand for imported goods. But with the US economy recovering, analysts believe the trade deficit will increase this year. The 8 percent increase in the first quarter deficit marked the third straight quarterly increase in the deficit, which now stands at the highest point since the final three months of 2008. The current account is the broadest measure of foreign trade because it measures not only trade in goods and services, which are tracked by the government on a monthly basis, but also investment flows between countries. In the first quarter, exports of US products rose by 5.2 percent, reflecting gains in sales of chemicals and heavy machinery and equipment. However, imports of foreign goods increased faster, rising by 6 percent, with much of this increase reflecting a larger foreign oil bill. Meanwhile, consumer prices fell for the second straight month, extending a break for Americans' pocketbooks. Less expensive energy bills were the main factor pulling down prices. The Labor Department reported Thursday that the Consumer Price Index, the government's most closely watched inflation barometer, dropped 0.2 percent in May, following a 0.1 percent dip in April. It marked the biggest decline since consumer prices plunged 0.7 percent in December 2008. In a separate report, the number of Americans filing new claims for jobless benefits jumped last week after three straight declines, another sign that the pace of layoffs has not slowed. Initial claims for jobless benefits rose by 12,000 to a seasonally adjusted 472,000, the Labor Department said Thursday. It was the highest level in a month. First-time jobless claims have hovered near 450,000 since the beginning of the year after falling steadily in the second half of 2009. That has raised concerns that hiring is lackluster and could slow the recovery. Still, the four-week average for unemployment claims dipped slightly to 463,500. That's down by 3,750 from the start of January.
