·
Last quarter the US current account
deficit posted a new record of $225.6B versus a revised 2Q deficit of
$217.1B which was slightly shallower than initially reported. The figure
matched Consensus expectations for a 3Q deficit of $225B.
· The deficit last quarter equaled 6.8% of GDP and so far this year has averaged 6.64% versus 6.35% during all of last year .
· The deficit in merchandise trade deteriorated to $218.6B from an unrevised 2Q deficit of $210.6B. Exports grew 3.6% (16.5% y/y) yet that strong gain was again offset by a 3.7% surge in imports (13.5% y/y).
· Last quarter, higher oil prices caused the balance in petroleum trade to deteriorate to $75.2B from $71.4B during 2Q. The nonpetroleum trade balance reversed all of its 2Q improvement and fell to $138.7B which was just shy of the record set during last year's fourth quarter.
· The surplus in services trade
improved sharply to a surplus of $18.3B from a revised $17.5B during 2Q
which was better than initially estimated. Exports of services grew just
0.9% (8.5% y/y) last quarter but services imports grew an even smaller
0.1% (8.6% y/y).
· The U.S. capital account improved q/q though the net US foreign direct investment balance deteriorated. U.S. direct investment abroad rose 35% to $$63.1B (37.7% y/y). Foreign direct investment in the US, however, increased $44.1B, less than the $45.8B increase during 2Q.
· Would Protectionism Defuse Global Imbalances and Spur Economic Activity? from the Federal Reserve Bank of New York is available here.
· Should We Worry About the Current Account Deficit? from the Federal Reserve Bank of Richmond can be found here.
· How Dangerous is the U.S. Current Account Deficit? from the Federal Reserve Bank of St. Louis is available here.