WASHINGTON (Reuters) - The U.S. current account deficit in the third quarter widened sharply to its highest level in nearly seven years as a strong dollar weighed on exports and the profits of multinational corporations.
The Commerce Department said on Thursday the current accountdeficit, which measures the flow of goods, services andinvestments into and out of the country, increased 11.7 percentto $124.1 billion, the largest shortfall since the fourth quarter of 2008.
The second-quarter deficit was revised up to $111.1 billion from $109.7 billion.
Economists polled by Reuters had forecast the deficit rising to $118.0 billion. The third-quarter current account deficit represented 2.7 percent of gross domestic product, the biggest percentage since the second quarter of 2012. That was up from 2.5 percent in the second quarter.
Despite the deterioration in the third quarter, the current account deficit remained well below a record high of 6.3 percent touched in the fourth quarter of 2005 as strong domestic energy production and plummeting oil prices kept the import bill in check.
The dollar has gained 19.2 percent versus the currencies of the United States’ main trading partners over the last 18 months, putting pressure on the profits of multinational firms such as household products giant Procter & Gamble Co and healthcare conglomerate Johnson & Johnson.
In the third quarter, direct investment income receipts from subsidiaries of U.S. companies fell to $105.3 billion from $108.0 billion. Exports of goods fell 1.2 percent to $379.9 billion.
Reporting by Lucia Mutikani; Editing by Paul Simao