The U.S. current-account deficit widened from $96.2 billion in 1999:IVQ to $102.3 billion in 2000:IQ. This movement reflects a decrease in the surplus on the services balance combined with an increase in the goods deficit. This rapidly increasing goods deficit, resulting primarily from imports to the U.S., almost completely accounts for the sharp increase in the current-account deficit since 1997. Imports have been boosted by rising incomes and by a strong dollar that makes imports to the U.S. cheaper and exports more expensive.
Suggested citation: "International Developments," Federal Reserve Bank of Cleveland, Economic Trends, no. 00-07, pp. 18-19, 07.01.2000.