The U.S. Commerce Dept. said that the U.S. current account deficit has hit an all-time record. The current account, which is the country's broadest deficit measure of international trade surged to $804.9 billion in 2005, the result of deepening debt to foreign nations.
According to the Associated Press, the deficit in the current account was up 20.4 percent from the previous record of $668.1 billion set in 2004. The current account not only tracks goods and services but also investment flows between countries.
The 2005 current account trade deficit was also up as a percentage of the total economy at 6.4 percent of total economic output. That's an increase from 5.7 percent in 2004, which is also a record. According to the Associated Press, for 2005, the $804.9 billion deficit reflected a huge jump in the deficit in goods to $781.6 billion, compared to $665.4 billion in 2004. America's surplus in services such as banking, insurance and tourism increased to $58 billion, up from $47.8 billion in 2004. The surplus in investments shrank to $1.6 billion last year, down from $30.4 billion in 2004. Economists told AP that the surplus will eventually disappear, reflecting the fact that the country is now the world's largest net debtor nation with foreigners owning more in U.S. assets than Americans own in foreign assets.