Recent Updates

  • Japan: Flow of Funds (Q2), Government Bond Trading Volume by Category of Investors (Aug)
  • New Zealand: GDP (Q2)
  • Hong Kong: Centa City Index (July); Malaysia: Motor Vehicle Sales (Aug)
  • US: BOP (Q2), New Residential Construction (Aug)
  • Scotland GDP Chained Volume Measures (Q2)
  • Canada: Final Housing Starts (Aug)
  • more updates...

Economy in Brief

U.S. Current Account Deficit Eased Further in Q3
by Tom Moeller December 17, 2007

The US current account deficit fell further last quarter to $178.5 billion from $188.9 billion in Q2, a figure that was revised slightly shallower. The Q3 deficit was shallower than Consensus expectations for a deficit of $183.3 billion.

The latest deficit totaled 5.1% of GDP and it peaked as a percentage of GDP nearly two years ago at 6.8% in Q4 2005.

That shrinkage occurred as the deficit on merchandise trade improved slightly $199.7B from Q2's deficit of $204.2B and from its deepest shortfall a year ago of $219.9B During the last year only, exports grew 10.0% and outpaced the 4.4% y/y growth in imports.

The effects of the lower U.S. dollar and the strength of foreign economies versus the U.S. is apparent most decisively in the surplus in services trade. It improved markedly to a record surplus of $26.5B from $25.8B in 2Q. Exports of services during the last year alone grew 14.3%. Travel exports grew 17.7% y/y, passenger fares were up 10.9% and freight shipping grew 11.3%. Import growth, conversely was contained to 9.2% due to moderate 7.7% growth in travel, 4.8% growth in passenger fares and a slight 1.4% advance in private freight transportation.

Foreign trade zones from the Federal Reserve Bank of Minneapolis can be found here.

US Balance of Payments,
 Bil.$, SA
Q3 2007 Q2 2007 Year Ago 2006 2005 2004
Current Account Balance ($ Bil.) -178.5 -188.9 -217.3 -811.5 -754.8 -640.2
  Deficit % of GDP -5.1 -5.5 -6.6 -6.2 -6.1 -5.5
  Balance on Goods ($ Bil.) -199.7 -204.2 -218.9 -838.3 -787.1 -669.6
    Exports  3.5% 1.2% 11.0% 12.7% 10.9% 13.7%
    Imports  2.4% 0.9% 4.4% 10.4% 12.9% 16.8%
  Balance on Private Services ($ Bil.) 26.5 25.8 19.6 79.8 72.8 57.5
    Exports 2.4% 5.1% 14.3% 9.9% 10.5% 14.7%
    Imports 2.2% 3.1% 9.2% 9.3% 8.7% 16.8%
  Balance on Income ($ Bil.) 20.5 12.7 5.9 36.6 48.1 56.4
  Unilateral Transfers ($ Bil.) -25.8 -23.2 -23.9 -89.6 -88.5 -88.4
close
large image