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Economy in Brief

U.S. Current Account Deficit Shrinks to its Least Since 1999
by Tom Moeller  March 19, 2014

The U.S. current account deficit decreased in Q4'13 to $81.1 billion from $96.4 billion in Q3. It was the smallest quarterly deficit since Q3 1999. It represented 1.9% of GDP, the least since Q3 1997. The Action Economics Forecast Survey called for a deficit of $88.2 billion. For all of last year, the deficit shrank to $379.3, its least since 1999. Exports of goods, services and income grew 2.5% in Q4 (4.2% y/y), while imports edged up 0.7% (1.3% y/y). For the full year, exports of goods, services & income gained 2.5% after a 3.9% rise in 2012. Imports ticked up 0.3% last year after a 3.1% increase in 2012.

Last quarter's deficit on merchandise trade shrank to $171.8 billion, its least in three years. Goods exports rose 1.9% (3.8% y/y) last quarter, the strongest rise since Q3'11. Imports of goods increased marginally in Q4, up 0.8% y/y. The year's deficit of $703.9 billion was the smallest since the recession year of 2009.

The trade surplus on services improved to $57.9 billion. Services exports increased 1.7% (4.5% y/y). Travel exports gained 2.1% (10.3% y/y) and passenger fares improved 2.8% (6.7% y/y). Imports of services rose 1.6% (4.1% y/y), as travel imports were up 2.7% (7.1% y/y). The $229.0 billion surplus on services trade last year set another record.

The surplus on income improved to a record $64.4 billion as receipts from abroad grew 4.7% y/y and payments to foreigners increased 1.3%. For the year, the surplus improved to a near-record $228.8 billion.

From the capital account, the deficit on private direct investment abroad improved during the year to $166.3 billion, its least since 2010.

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 Q4'13 Q3'13 Q1'13 2013 2012 2011
Current Account Balance ($ Billion) -81.1 -96.4 -96.8 -379.3 -440.4 -457.7
  Deficit % of GDP -1.9% -2.3% -2.3% -2.3% -2.7% -3.0%
 Balance on Goods ($ Billion) -171.8 -178.4 -175.0 -703.9 -741.5 -744.1
  Exports 1.9% 0.6% 1.0% 1.8% 4.4% 16.1%
  Imports 0.2% 1.0% 0.0% -0.4% 2.8% 15.5%
 Balance on Services ($ Billion) 57.9 56.9 57.5 229.0 206.8 187.3
  Exports 1.7% 0.5% 1.7% 5.0% 5.2% 11.0%
  Imports 2.4% -0.7% -0.9% 1.4% 4.6% 5.6%
 Balance on Income ($ Billion) 64.4 59.1 55.2 228.8 223.9 232.6
Unilateral Transfers ($ Billion) -31.6 -34.0 -34.5 -133.2 -129.7 -133.5
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