A drop in exports of petroleum and other U.S. goods increased the deficit in the broadest measure of U.S. trade in the July-September quarter.

The Commerce Department says the current account deficit increased to $124.1 billion from $111.1 billion in the second quarter. The current account tracks trade in goods and services and investment flows.

Cheaper oil weighed on the export of U.S. goods, which fell to $379.9 billion in the third quarter from $384.7 billion in the previous three months. American businesses and investors also earned less on their holdings overseas, while foreigners earned more on their U.S. investments.

The strong dollar has also dragged down U.S. exports, because it makes American goods more expensive overseas. The dollar's value has increased about 12 percent in the past year.