Associated Press Writer
WASHINGTON (AP)-- America's deficit in the broadest measure of trade narrowed to $106.5 billion in the second quarter as the global economic slowdown sapped demand.
The Commerce Department reported Wednesday that the deficit in the current account shrank by 4.7 percent from the previous quarter, which showed an imbalance of $111.8 billion.
The current account is considered the best measurement of a country's international economic standing because it measures not just the goods and services reflected in the government's monthly trade reports but also investment flows between countries and unilateral transfers, including U.S. foreign aid payments.
The latest snapshot of trade activity comes as President Bush seeks unilateral authority to negotiate any trade accord on behalf of the United States, something Congress refused to give former President Clinton.
Bush faces stiff opposition on Capitol Hill for such fast-track trade authority. Many lawmakers want to condition further trade liberalization on improving environmental and labor standards abroad.
Administration officials say fast-track authority would help the sagging economy by lifting tariffs that discourage other countries from buying American goods and services.
But organized labor and other critics contend jobs would be lost and the environment would suffer if Bush were given unfettered power to negotiate trade deals.
In the April-June quarter, the deficit in goods decreased to $107.8 billion, an increase from $112.5 billion in the first quarter. In the services category, which measures such things as airline travel, the United States is running a surplus. The surplus grew to $18.9 billion in the second quarter, up from $17.5 billion.
The deficit in investment earnings widened to $5.5 billion in the second quarter, compared with $5 billion in the previous quarter.
The category of unilateral transfers climbed to $12.1 billion in the second quarter. This category adds to the overall current-account deficit because it represents payments that the U.S. government makes in foreign aid to other countries.