The U.S. current-account deficit widened as expected in the third quarter to $108 billion, largely driven by a big trade deficit, the Commerce Department reported Wednesday in a sign that the economy was starting to rebound as demand for foreign goods increased. The current-account deficit-the broadest measure of trade because it includes investment flows as well as trade in goods and services-rose in the July-September period from $98 billion in the second quarter, an increase of 10.3 percent. The third-quarter increase reflected a sharp widening of the deficit in goods as U.S. demand for imports outpaced the rise in U.S. exports. It was the first widening of the deficit following four consecutive quarterly declines that were the result of a deep recession which limited U.S. demand for foreign products. Both U.S. exports and imports rose in the third quarter, a sign that global trade is recovering after being slowed by last year"s financial crisis. Goods exports rose in the third quarter to $263.9 billion from $246.1 billion in the previous quarter, while imports jumped to $396.1 billion from $361.6 billion. U.S. companies have been seeing export sales increase in recent months. Economists believe that continued strength in exports will be a key source of support for the economy as it struggles to emerge from the worst recession in seven decades. The rise in exports has been helped by a 10 percent decline in the value of the U.S. dollar against a group of major currencies since the dollar hit a 2009 high in March. A weaker dollar makes U.S. products cheaper and thus more competitive on overseas markets. The U.S. surplus on investment income widened to $23.7 billion in the third quarter from $16.7 billion, meaning that Americans earned more on their overseas investments than foreigners earned on their U.S. investments. The deficit in unilateral transfers-the category that includes government and non-government foreign aid-rose to $34.4 billion from $33.4 billion in the second quarter. --SPA
