Most countries engage in international trade with the rest of the world. A country's current account balance tracks the net flows of goods, services, and unilateral transfers between the country and the rest of the world.

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If unit labor costs rise in one country at a faster rate than its trading partners, that country may find its manufacturing output to be increasingly priced out of world markets. The resulting trade imbalance can put downward pressure on the country's currency, which in turn will create domestic inflationary pressure by raising the cost of imports.

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Since GDP measures domestically produced goods and services, it includes exports sold to purchasers outside the U.S., but does not include imports produced outside the U.S. In recent years the value of U.S. imports has exceeded that of U.S. exports. Levels of international trade continue to grow as technology and communications have permitted firms to globalize their production and sales.

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