A fall in US exports and lower income from overseas investments pushed up the US current account deficit to its highest level in 18 months, AP reported.
According to the commerce department, the deficit rose steeply to a seasonally adjusted $111.2 billion in the January-March quarter, up from a revised total of $87.3 billion in the October-December quarter. The Q4 total was at the lowest level in 14 years.
The current account was the US' broadest measure of trade, which also covered investment flows in addition to goods and services. A wider deficit could serve as a drag on growth as it meant US companies were earning less from their overseas markets.
Rising petroleum exports had narrowed the gap in recent years, though such exports were down in the first quarter, increasing the deficit.
Overall exports fell to $399.7 billion from $407.1 billion in the previous quarter, the report released Wednesday showed. Exports of food and feeds were also down, mostly due to falling soybean exports. Harsh winter weather also hurt many US harvests.
A larger trade gap in the first three months of the year shaved off a full percentage point from growth. According to estimates by economists, the economy contracted at an annual pace of 2 per cent in the first quarter.
With the release of the data, the US dollar was down to losses against the euro, with EUR/USD increasing 0.14 per cent to trade at 1.3565.
The outlook for US equity markets, however remained mixed.
The Dow futures indicated a loss of 0.05 per cent at the open, while the S&P 500 pointed to an increase of 0.04 per cent, with the Nasdaq 100 indicating a rise of 0.1 per cent.