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The overall U.S. trade deficit narrowed 11.7 percent from January through March, due partly to strong overseas purchases of American services such as travel and telecommunications, the government said Tuesday.

Meanwhile, consumer prices edged up a tiny 0.1 percent in May as the biggest drop in gasoline costs in more than two years helped offset a sharp jump in vegetable prices, the government said Tuesday.The Commerce Department said the first-quarter gap in the U.S. current account totaled $20.91 billion, down from $23.69 billion during the final three months of 1992.

The October-December imbalance was 33.3 percent bigger than the third-quarter deficit of $17.78 billion.

The improvement resulted in part from a surplus in services sold overseas. American's investment income also rose while government payments overseas dropped. Those helped offset a continuing deficit in U.S. merchandise trade.

"The U.S. trade in services has become extremely important in our international trade statement and performance," said Allen Sinai, an economist and managing director at Lehman Brothers. "We are king of the hill in these areas."

The current account is considered the broadest measure of America's international competitiveness because it tracks not only trade in merchandise but also trade in services and investment flows between the United States and other nations.

The current account deficit peaked at $160.20 billion in 1987 and then fell steadily each year until 1991, when it totaled just $3.68 billion, in part because of allied reimbursement of U.S. expenses in the Persian Gulf War.

But the gap began widening last year, reaching $62.45 billion, and many analysts believe it will top $100 billion again this year.

They point out that weakness in the economies of many of America's trading partners is curbing demand for U.S. goods and services. Exports have been one of the few sources of strength in the U.S. economy in the past four years.

At the same time, an improving U.S. economy is fueling demand for products and services, both foreign and domestic.