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U.S. current account narrows more than expected

Cranes that load and unload cargo containers from ships stand in the vertical, idle position at the port of Los Angeles.

Reed Saxon/AP

The U.S. current account deficit shrank more than expected in the second quarter as the country imported fewer goods while income earned on U.S. assets abroad increased.

The deficit on the current account, which measures the flow of goods, services and investments into and out of the United States, narrowed to $117.4-billion, the Commerce Department said on Tuesday.

The deficit was equivalent to 3.0 per cent of gross domestic product and was the narrowest since the third quarter of 2011.

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Most of the narrowing came from a drop in the U.S. deficit on goods and an increase in the surplus on income, the Commerce Department said.

Imports of goods fell 0.5 per cent during the quarter to $579.9-billion. Exports of goods rose 1.4 per cent to $394.1-billion.

The surplus on income increased to $55.5-billion as income receipts on U.S.-owned assets abroad rose to $184.6-billion.

Analysts surveyed before the report had expected the current account gap to narrow to $125.5-billion.

The Commerce Department revised its estimate of the first-quarter current account deficit to $133.6-billion, from $137.3-billion previously.

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