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Economy in Brief

U.S. Current Account Deficit Deepened
by Tom Moeller December 16, 2004

The US current account deficit deepened slightly in 3Q04 to a record $164.7B versus $164.4B the prior quarter, originally reported at $166.2B. Consensus expectations had been for a 3Q deficit of $171.0B.

The deficit in merchandise trade deteriorated to $166.7B from an unrevised $163.6B in 2Q. A 14.8% y/y gain in exports lagged an 18.7% rise in imports.

The surplus on services fell to $11.4B from a downwardly revised to $12.5B in 2Q. Exports of services rose 9.7% y/y while imports rose 13.1%.

From the capital account, US foreign direct investment abroad fell to $43.5B (-3.8% y/y) and foreign direct investment in the US surged to $53.1B, the highest level since 2Q01. The balance of $9.6B was the first positive balance since 2Q01.

US Int'l Balance of Payments 3Q '04 2Q '04 Y/Y 2003 2002 2001
Current Account Deficit $164.7B $164.4B $133.9B $530.7B $473.9B $385.7B
  Goods/Services/Income Deficit $150.1B $146.0B $115.0B $463.2B $414.6B $339.1B
    Exports 2.7% 3.6% 16.1% 5.8% -3.9% -9.0%
    Imports 2.7% 6.7% 19.8% 7.3% 1.5% -8.2%
  Unilateral Transfers Deficit $14.6B $18.3B $16.6B $67.4 $59.4B $46.6B
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