The latest data released in the U.S. today was weaker than expected. The current account deficit rose along with an increase in weekly unemployment claims.

The U.S. current account rose to a record high of US$130 billion in the second quarter, far exceeding expectations and up 15.6% from the first quarter. RBC Financial Group economists say that, “The reason for the spike is that the budding U.S. recovery sucked in imports, partly to avoid a west coast dockworkers’ strike and partly due to higher prices for oil, while the rest of the world was cautious in buying U.S. exports. That difference between imports and exports pushed the goods and services deficit alone to a record US$110.6 billion.”

Also, the deficit on investment income surged to US$6.3 billion from $950 million in Q1. “That growth reflects the flipside of the large current account deficit of the past several years, namely the huge move by the rest of the world into U.S. assets. As a result, factor payments by those U.S. assets leaving the country vastly outweigh similar flows coming into the country,” notes RBC.

“The bottom line is that the current account deficit sets a bearish tone. It means the U.S. economy remains the sole locomotive of world growth. As a percent of GDP the current account deficit now stands at a record 5%, flashing a danger sign for the value of the U.S. dollar as it means the capital flows required to fund that shortfall are enormous and unsustainable,” it notes.”

Additionally, U.S. initial unemployment claims rose to 426,000 last week, their highest level in four months. “Expectations were for a decline but instead claims rose 19,000,” said RBC. “Not a good sign that the U.S. job market got off to a good start in September. The recovery is a jobless one so far; in fact, layoffs are rising.”