US current account deficit narrows in Q4 to $125 billion

Economists forecast fall up to $118.9 billion in fourth quarter. For 2015, it totaled $484.1 billion, largest since 2008

The US current account deficit narrowed in the fourth quarter, but the improvement is unlikely to be sustained as a strong dollar continues to undercut exports of goods.

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, fell 3.6% to $125.3 billion. The third-quarter deficit was revised up to $129.9 billion from $124.1 billion.

Economists polled by Reuters had forecast the current account deficit falling to $118.9 billion in the fourth quarter. For 2015, it totaled $484.1 billion, the largest since 2008.

The fourth-quarter current account deficit represented 2.8% of gross domestic product, down from 2.9% in the July-September quarter. The deficit represented 2.7% of GDP for 2015, the largest since 2012 and up from 2.2% in 2014.

The current account deficit has declined from a record high of 6.3% of GDP in the fourth quarter of 2005, as rising domestic oil production and lower international oil prices keep the import bill in check.

The dollar gained 20% versus the currencies of the United States' main trading partners between June 2014 and December 2015, undermining exports. Goods exports fell 3.4% to $366.7 billion in the fourth quarter.