Reply #6: U.S. 3rd-Qtr Current-Account Gap Unexpectedly Narrows [View All]

Dec. 16 (Bloomberg) -- The U.S. current-account deficit unexpectedly narrowed from July through September, as insurance payments and donations from abroad poured in following Hurricane Katrina, a government report showed.

The deficit, the broadest measure of trade because it includes transfer payments and income from investments, shrank to $195.8 billion last quarter from a revised $197.8 billion the previous three months, the Commerce Department said today in Washington. It was the second straight narrowing after a record $198.7 billion in the first three months of the year.

The deficit is still likely to widen because demand for imported goods is rising as the economy grows, economists said. The trade deficit unexpectedly increased to a record $68.9 billion in October, as imports of crude oil, autos and televisions rose, a government report earlier this week showed.

``The insurance payments are going to go away,'' said Jay Bryson, global economist at Wachovia Corp. in Charlotte, North Carolina. ``The outlook remains very bleak.''

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