WASHINGTON (Reuters) - The U.S. current account deficit narrowed sharply in the fourth quarter as the Trump's administration's trade war with China led to the biggest reduction in the goods import bill since 2009.
The Commerce Department said on Thursday the current account deficit, which measures the flow of goods, services and investments into and out of the country, dropped 12.4% to $109.8 billion last quarter. Data for the July-September quarter was revised to show the deficit falling to $125.4 billion, instead of $124.1 billion as previously reported.
Economists polled by Reuters had forecast the current account gap shrinking to $109.0 billion in the fourth quarter.
The current account gap represented 2.0% of gross domestic product in the fourth quarter. That was the smallest share since the fourth quarter of 2013, and was down from 2.3 percent in the third quarter.
The 20-month U.S.-China trade war limited Chinese imports last quarter. At the same time, the United States became a net exporter of crude oil, dramatically reducing its dependence on foreign oil.
Goods imports goods dropped $20.6 billion, the largest decrease since the first quarter of 2009, to $612.5 billion. There were decreases in consumer goods imports such as
apparel, footwear and household goods. Imports of motor vehicles parts, and engines also fell.
Exports of goods decreased $2.5 billion to $409.7 billion. That largely reflected a decline in exports of soybeans.
For all of 2019, the current account, however widened 1.5% to $498.4 billion as the small goods imports bill was offset by rise in the secondary income shortfall and shrinking services surplus. The deficit was 2.3% of GDP, down from 2.4% in 2018.