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U.S. Trade Deficit - 4/9/15

The U.S. trade deficit, as reflect in the current account, is widening again.  During the final quarter of 2014, America’s current account deficit rose to one hundred and fourteen billion dollars, an increase of nearly fifteen percent from the third quarter deficit of ninety nine billion dollars.  For all of twenty fourteen, the current account deficit expanded nearly three percent to more than four hundred and ten billion dollars, the largest annual deficit since twenty twelve. 

A broadening trade deficit contributed to the slowdown in overall U.S. economic growth during last year’s fourth quarter and is anticipated to represent a drag on growth in twenty fifteen as a stronger dollar renders American products less competitive in overseas markets.  As reported by the Associated Press, the nation’s widening trade gap subtracted one point one percentage points from growth during the final three months of twenty fourteen. 

GDP only expanded two point two percent on an annualized basis during that time.  Many experts believe the U.S. dollar will continue to strengthen this year, making even more difficult for U.S. exporters to penetrate foreign markets and easier for American consumers to afford imported merchandise.

Anirban Basu, Chariman Chief Executive Officer of Sage Policy Group (SPG), is one of the Mid-Atlantic region's leading economic consultants. Prior to founding SPG he was Chairman and CEO of Optimal Solutions Group, a company he co-founded and which continues to operate. Anirban has also served as Director of Applied Economics and Senior Economist for RESI, where he used his extensive knowledge of the Mid-Atlantic region to support numerous clients in their strategic decision-making processes. Clients have included the Maryland Department of Transportation, St. Paul Companies, Baltimore Symphony Orchestra Players Committee and the Martin O'Malley mayoral campaign.