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Economy in Brief

U.S. Current Account Deficit is Deepest Since Q3 2012
by Tom Moeller  June 18, 2014

The U.S. current account deficit expanded sharply last quarter to $111.2 billion from $87.3 billion in Q4. It was the largest quarterly deficit since Q3 2012 and represented 2.6% of GDP. The Action Economics Forecast Survey called for a deficit of $97.0 billion. Exports of goods, services and income declined 1.3% in Q1 (+2.9% y/y), while imports gained 1.5% (3.2% y/y). The current account figures underwent extensive revisions with this latest release.

Last quarter's deficit on merchandise trade expanded to $182.3 billion from $169.1 billion. Goods exports declined 1.8% (+1.8% y/y) last quarter and reversed most of the fourth quarter increase. Imports of goods increased 1.0% (2.1% y/y) following no change in Q4. The $182.3 billion goods deficit was the largest since Q2 2012.

The surplus on services trade deteriorated to $55.5 billion. Services exports slipped 0.2% (+2.7% y/y). Travel exports gained 1.5% (4.7% y/y) but exports of financial services declined 3.1% (+4.9% y/y). Imports of services gained 0.7% (5.0% y/y), as travel imports increased 0.9% (5.2% y/y). Imports of financial services fell 2.6% (+12.6% y/y).

The surplus on primary income deteriorated to $46.7 billion as investment income from abroad grew 4.2% y/y and payments to foreigners increased 5.1%. The balance on secondary income (transfer payments) deteriorated to $-31.0 billion as exports increased 9.8% y/y and imports gained 5.6% y/y.

From the financial account, the surplus on private direct investment surged to $172.5 billion, but on portfolio investments the deficit expanded to $139.1 billion.

Balance of Payments data are in Haver's USINT database, with summaries available in USECON. The expectations figure is in the AS1REPNA database.

The Comprehensive Restructuring of the International Economic Accounts from the Bureau of Economic Analysis is available here.

US Balance of Payments SA Q1'14 Q4'13 Q3'13 2013 2012 2011
Current Account Balance ($ Billion) -111.2 -87.3 -101.3 -400.3 -460.8 -459.3
  Deficit % of GDP -2.6% -2.0% -2.4% -2.3% -2.7% -3.0%
 Balance on Goods ($ Billion) -182.3 -169.1 -177.9 -701.7 -742.1 -740.6
  Exports -1.8% 2.3% 0.8% 2.0% 4.2% 16.2%
  Imports 1.0% 0.0% 0.7% -0.4% 2.9% 15.5%
 Balance on Services ($ Billion) 55.5 56.6 56.7 225.3 204.5 192.0
  Exports -0.2% 1.1% 1.4% 5.0% 4.3% 11.4%
  Imports 0.7% 1.7% 0.8% 2.6% 3.4% 6.5%
 Balance on Primary Income ($ Billion) 46.7 54.6 51.5 228.8 223.9 232.6
 Balance on Secondary Income ($ Billion) -31.0 -29.5 -31.6 -123.5 -126.1 -131.7
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