June 20, 2018 / 12:44 PM / a month ago

U.S. current account deficit widens to 2.5 percent of GDP

WASHINGTON (Reuters) - The U.S. current account deficit widened in the first quarter, driven by increases in goods imports, the Commerce Department said on Wednesday in a report that also showed U.S. firms paid more than $300 billion in dividends from repatriated earnings.

FILE PHOTO: A money changer holds U.S. dollar bills at a street in downtown Lima, Peru, December 15, 2017. REUTERS/Mariana Bazo

The Commerce Department said the current account deficit, which measures the flow of goods, services and investments into and out of the country, widened by $8.0 billion to $124.1 billion, or 2.5 percent of national economic output, in the first three months of the year.

Analysts polled by Reuters had expected the current account deficit to widen to $129.0 billion from the previously reported $128.2 billion in the fourth quarter.

The Commerce Department said a tax overhaul passed by Congress in December 2017, which offered a one-time repatriation tax on foreign earnings, led many companies to bring back cash parked abroad.

Companies paid out dividends and other withdrawals of $305.6 billion from foreign receipts, the department said, which far outstripped the amount of this cash which was reinvested domestically.

Reporting by Jason Lange; Editing by Paul Simao

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