WASHINGTON – The Commerce Department reports on the U.S. current account trade deficit for the July-September quarter. The report will be released at 8:30 a.m. Eastern Wednesday.
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SMALLER DEFICIT: Economists believe the deficit narrowed to $95 billion in the third quarter, down 3.6 percent from the previous quarter, according to a survey by data firm Fact Set.
STRONG DOLLARS, WEAK OIL: The current account is the broadest measure of trade. It covers not only goods and services but also investment flows between countries. The current account deficit likely fell as the dollar increased in value relative to other currencies and oil prices fell by almost 50 percent since June.
The average price of a barrel of oil has dropped below $56 from a summer high of $107. That reflects weakening global demand as Japan has tumbled into a recession, Europe staves off a slowdown, China's economy loses momentum and Russia copes with its collapsing currency. But U.S. consumers have largely been insulated from these pressures and benefited from less expensive oil.
At the same time, the global slowdown has caused more investors to crowd into the dollar as a relative safe haven.
The current account is still relatively low by historical standards. The quarterly deficits regularly topped $150 billion in the four years before the Great Recession of 2007-2009.