Record US trade deficit in 2006

The current account measures trade in goods and investments

The US current account deficit jumped by 8.2% to a record $856.6bn (£444bn) in 2006, official figures show.

The rise, the fifth consecutive annual increase in the deficit, came despite a smaller trade imbalance in the final three months of 2006.

The deficit shrank by 14.6% to $195.8bn during the fourth quarter, reflecting a fall in world oil prices.

The current account is the broadest measure of trade, covering goods and investment flows between countries.

Foreign demand

The deficit for 2006 meant the US was borrowing more than $2bn daily to finance its trade gap.

The annual figure represented 6.5% of US gross domestic product in 2006, up from 6.4% in 2005.

However, Nigel Gault, US economist at Global Insight, said he believed the country's current account deficit had "peaked".

"The trends are becoming favourable. Robust export growth, and some cooling in import growth, should keep the deficit down this year," Mr Gault said.

The US has so far financed its expanding current account deficit through foreign demand for US Treasury securities, particularly from Japan and China.