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Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
Profits & Margins Plunge In Q1: Expect More Margin Contraction As Fed Squeezes Inflation
The Many Links of Inflation Cycle: Hard Landing Is Needed to Crack Them
Peak Inflation and Fed Policy: A Relationship which Should Worry the Fed and Scare Investors
Why Have the Yields on TIPS Been Negative in the Past Two Years?
by Tom Moeller March 14, 2012
The U.S. current account deficit rose last quarter to $124.1B from $107.6B in Q3 as a modest gain in imports outpaced a slight export decline. Consensus expectations were for $114.2B in Q4. The ratio to GDP last quarter was 3.2%, roughly the same as for all of 2010. The overall deficit's increase occurred as the goods deficit in Q4 deepened to $186.3B.
For all of last year, the current account deficit of $473.4B still was nearly half that five years ago. Last year's rough stability versus 2010 occurred as merchandise balance deterioration was offset by services & income improvement. The deficit on goods trade deepened to $738.3B from $645.9B. Goods exports rose 16.2%, driven by the lower value of the dollar, and merchandise imports rose 15.6%, driven by higher oil prices. The surplus on services trade improved for the year to $178.3B from $145.8B as exports rose 10.7% and imports increased 6.5%. The balance on income improved to $221.1B from $165.2B.
From the capital account, 2011 saw $783.7B paid to foreigners on investment in the U.S. which by far exceeded $396.4B in payments to the U.S. The imbalance largely reflects foreign ownership of U.S. financial assets. Payments on U.S. direct investment abroad totaled $406.2B while payments on foreign direct investment in the U.S. were $227.9B.
Balance of Payments data are in Haver's USINT database, with summaries available in USECON. The expectations figure is in the AS1REPNA database.
| US Balance of Payments SA | Q4'11 | Q3'11 | Q2'11 | Year Ago | 2011 | 2010 | 2009 |
|---|---|---|---|---|---|---|---|
| Current Account Balance($Bil.) | -124.1 | -107.6 | -123.4 | -113.3 | -473.4 | -470.9 | -376.6 |
| Deficit % of GDP | 3.2% | 2.8% | 3.3% | 3.0% | 3.1% | 3.2% | 2.7% |
| Balance on Goods ($Bil.) | -186.3 | -180.9 | -189.7 | -159.2 | -738.3 | -645.9 | -505.9 |
| Exports | -0.6% | 2.6% | 3.2% | 11.0% | 16.2% | 20.5% | -18.2% |
| Imports | 0.6% | 0.2% | 3.7% | 12.9% | 15.6% | 22.8% | -26.3% |
| Balance on Services ($Bil.) | 45.3 | 46.2 | 44.5 | 40.5 | 178.3 | 145.8 | 124.6 |
| Exports | -0.3% | 3.0% | 3.3% | 9.1% | 10.7% | 8.6% | -5.5% |
| Imports | 0.3% | 2.8% | 2.6% | 8.0% | 6.5% | 5.8% | -5.6% |
| Unilateral Transfers ($Bil.) | -33.3 | -33.5 | -35.5 | -33.4 | -134.6 | -136.1 | -123.3 |
