The Commerce Department said Thursday that the deficit in the current account increased to $109 billion in the January-March period, compared to a revised $100.9 billion in the fourth quarter of last year.

The current account deficit narrowed to $378.4 billion in 2009, down a sharp 43.4 percent from the 2008 deficit of $668.9 billion. The big drop reflected a deep recession in the United States, which cut demand for imported goods. But with the US economy recovering, analysts believe the trade deficit will increase this year.

The 8 percent increase in the first quarter deficit marked the third straight quarterly increase in the deficit, which now stands at the highest point since the final three months of 2008.

The current account is the broadest measure of foreign trade because it measures not only trade in goods and services, which are tracked by the government on a monthly basis, but also investment flows between countries.

The figure is watched closely by economists because it is a measure of how much the United States must borrow from foreigners to finance its balance of payments imbalance.

In the first quarter, exports of US products rose by 5.2 percent, reflecting gains in sales of chemicals and heavy machinery and equipment. However, imports of foreign goods increased faster, rising by 6 percent, with much of this increase reflecting a larger foreign oil bill.

Manufacturing has been the standout performer so far in the recovery as US companies benefit not only from rising domestic demand, but increased global sales. But the worry is that the European debt crisis and the rising value of the dollar could undercut further export gains.

The 2009 deficit represented 2.7 percent of the total economy as measured by the gross domestic product, the lowest level since 1998. The current account deficit hit a high of 6 percent of GDP in 2006.

That had raised concerns over whether foreigners would continue to be willing to finance America's huge trade deficits. Now the bigger concern is over foreigners' willingness to purchase US Treasury securities to finance America's soaring federal budget deficits.

For the first quarter, the deficit in goods and services increased by $10.5 billion to $115.3 billion, reflecting higher-priced oil imports and increased imports of manufactured goods.

Offsetting this increase slightly was a rise in income earnings of $6.6 million to $41.7 billion. However, unilateral transfers, which include foreign aid, rose by $4.2 billion to $35.5 billion.

Economists believe that the current account deficit will continue to widen this year but will not climb to the previous record levels.

Meanhwile, the number of Americans filing new claims for jobless benefits jumped last week after three straight declines, another sign that the pace of layoffs has not slowed.

Initial claims for jobless benefits rose by 12,000 to a seasonally adjusted 472,000, the Labor Department said Thursday. It was the highest level in a month and overshadowed a report that consumer prices remain essentially flat.

First-time jobless claims have hovered near 450,000 since the beginning of the year after falling steadily in the second half of 2009. That has raised concerns that hiring is lackluster and could slow the recovery.

The four-week average for unemployment claims, which smooths volatility, dipped slightly to 463,500. That's down by 3,750 from the start of January.

A separate Labor report said consumer prices fell for the second straight month. The 0.2 decline in the Consumer Price Index was pulled down falling energy prices — most notably a 5.2 percent drop in gasoline prices. Declining energy bills were the main factor pulling down prices.

But core consumer prices, which strip out volatile energy and food, edged up 0.1 percent in May, after being flat in April. Core prices are up only 0.9 percent over the past year — below the Fed's inflation target.