Washington, Rabi'I 6, 1437, Dec 17, 2015, SPA -- The U.S. current-account deficit widened sharply in the third quarter as a strong U.S. dollar limited exports and the profits of multinational corporations, the government reported Thursday. The current account—the broadest measure of international trade as it includes goods, services, and investments—jumped 11.7 percent to $124.1 billion in the July-September period, the biggest deficit since the fourth quarter of 2008. The third-quarter current-account deficit represented 2.7 percent of gross domestic product (GDP), the biggest percentage since the second quarter of 2012. It was up from 2.5 percent in the second quarter. The dollar has gained 19.2 percent versus other major currencies over the last 18 months, pressuring the profits of multinational companies. Cheaper oil also hurt the export of U.S. goods, which fell 1.2 percent to $379.9 billion in the third quarter from $384.7 billion in the April-June period. Direct investment income from subsidiaries of U.S. companies fell to $105.3 billion in the third quarter from $108 billion the previous quarter. With the Federal Reserve (Fed) lifting U.S. interest rates for the first time in seven years while other major central banks like the European Central Bank and Bank of Japan are still taking steps to lower interest rates, the discrepancy may cause investors to shift money into U.S. assets, which will pay higher returns as interest rates rise. That, in turn, should further increase the value of the dollar, potentially causing more distress for U.S. exporters in coming months. --SPA 18:36 LOCAL TIME 15:36 GMT www.spa.gov.sa/w
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