MARTIN CRUTSINGER, AP Economics Writer
WASHINGTON (AP) — The deficit in the broadest measure of U.S. trade declined slightly in the final three months of 2015, but for the entire year the deficit jumped to the highest level in seven years.
The deficit in the current account narrowed to $125.3 billion in the fourth quarter, down 3.6 percent from a deficit of $129.9 billion in the third quarter, the Commerce Department reported Thursday.
The deficit for the entire year rose to $484.1 billion, up 24.3 percent from a 2014 imbalance of $389.5 billion. It was the biggest annual deficit since 2008 when the deficit totaled $690.8 billion.
The big deterioration reflected the struggles that U.S. companies are having as weakness in major economies overseas and a stronger dollar have sharply reduced export sales.
The current account is the broadest measure of U.S. trade because it covers not just trade in merchandise but also trade in services such as airline fares and legal fees and also covers investment flows between countries.
The rising trade deficit trimmed overall economic growth by 0.6 percentage point in 2015, a significant reduction for an economy that grew at a modest 2.4 percent last year, as measured by the gross domestic product.
Analysts say trade will act as a drag on growth this year as manufacturers and other exporters including farmers continue to struggle to sell their products abroad.
Trade deficits have become a major topic in this year’s presidential race with Republican Donald Trump and Democrat Bernie Sanders both contending that the country has been hurt by the failure of the U.S. government to negotiate trade deals that protect American jobs from being lost to other nations engaged in unfair trading practices.
The 2015 deficit was equal to 2.7 percent of total U.S. economic output, up from 2.2 percent of GDP in 2014.
The increase in the total deficit reflected a 2.4 percent rise in the deficit in merchandise. U.S. goods exports dropped by 7.2 percent, the first annual decline in goods exports since 2009, a year when the global economy was struggling to emerge from a deep recession.
Copyright 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.Tagged with tED