U.S. current account widens; companies bring home piles of cash
Reuters
Published Dec 19, 2018 09:27AM ET
U.S. current account widens; companies bring home piles of cash
WASHINGTON (Reuters) - The U.S. current account deficit increased in the third quarter as imports surged, the Commerce Department said on Wednesday in a report that also showed U.S. firms brought into the United States $92.7 billion in repatriated earnings.
The Commerce Department said the current account deficit, which measures the flow of goods, services and investments into and out of the country, widened to $124.8 billion, or 2.4 percent of national economic output, in the July-September period.
Analysts polled by Reuters had expected the current account deficit to widen to $124.3 billion.
The department report also showed a rebound in foreign direct investment during the third quarter, with foreign firms sinking $116.3 billion into the country.
The rebound followed a rare drop in foreign investment during the second quarter, which some analysts attributed to questions over how a 2017 tax overall would be implemented and trade tensions between the United States and a range of trade partners.
Wednesday's data seemed to suggest that any impact on foreign investment was so far fleeting. Over the past two quarters, foreign firms invested about $115 billion in the United States, up from about $109 billion in the prior two quarters.
The Commerce Department said a tax overhaul passed by Congress in December 2017, which changed how repatriated earnings are taxed, led many companies to bring back cash parked abroad.
Companies paid out dividends and other withdrawals of $92.7 billion from foreign receipts during the third quarter, the department said, which far outstripped the amount of this cash which was reinvested.
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Written By: Reuters
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