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Economy in Brief

U.S. Current Account Deficit Deepens Significantly
by Tom Moeller  March 19, 2015

During all of 2014, the current account deficit deepened to $410.6 billion from $400.3 billion in 2013. The increase occurred as exports of goods, services & income rose 3.5% and imports gained 3.4%. The deficit deepened to $113.5 billion last quarter from $98.9 billion in Q3. It amounted to 2.6% of GDP. Exports of goods, services and income fell 1.3% (+0.8% y/y), the third decline of last year, while imports nudged 0.4% higher (3.7% y/y). The Action Economics Forecast Survey called for a Q4 deficit of $103.0 billion.

The Q4 deficit on merchandise trade deepened to $185.2 billion. Goods exports declined 1.2% (0.7% y/y), the first decline since Q1, and imports of goods slipped 0.1% (+3.3% y/y).

The trade surplus on services improved to a record $58.2 billion. Services exports increased 2.1% (3.3% y/y). Travel exports improved 1.7% (0.8% y/y) and financial services exports jumped 8.2% (4.8% y/y). Imports of services gained 2.3% (3.7% y/y), as travel imports increased 4.1% (8.6% y/y) and financial services improved 2.5% (1.9% y/y).

The surplus on primary income fell back from its near-record to $50.6 billion as receipts from abroad declined 4.1% (+1.3% y/y) and payments to foreigners ticked up 0.4% (4.5% y/y). The trade deficit on secondary income deteriorated sharply to a record $37.0 billion.

From the financial account, private direct investment abroad of $128.3 billion was the most since Q2 2011 but accompanied a sharp decline in portfolio investments to $89.8 billion. Direct investments from abroad totaled $47.7 billion and portfolio investments were $145.8 billion.

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 Q4'14 Q3'14 Q2'14 Y/Y 2014 2013 2012
Current Account Balance ($ Billion) -113.5 -98.9 -97.3 -87.3 -410.6 -400.3 -460.8
  Deficit % of GDP -2.6 -2.3 -2.3 -2.1% -2.4% -2.4% -2.9%
 Balance on Goods ($ Billion) -185.2 -181.1 -188.2 -169.1 -735.8 -701.7 -742.1
  Exports -1.2% 1.3% 2.3% 0.7% 2.7% 2.0% 4.2%
  Imports -0.1% -0.3% 2.8% 3.3% 3.3% -0.4% 2.9%
 Balance on Services ($ Billion) 58.2 57.2 58.0 56.6 231.1 225.3 204.5
  Exports 2.1% -0.6% 1.8% 3.3% 3.2% 5.0% 4.3%
  Imports 2.3% -0.2% 2.5% 3.7% 3.5% 2.6% 3.4%
 Balance on Primary Income ($ Billion) 50.6 59.8 54.9 54.6 217.9 199.7 203.0
 Balance on Secondary Income ($ Billion) -37.0 -34.8 -22.0 -29.5 -123.8 -123.5 -126.1
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