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Economy in Brief

U.S. Current Account Deficit Deepens
by Tom Moeller  December 17, 2015

The U.S. Current Account Deficit increased to $124.1 billion in Q3 from $111.1 billion in Q2, and was the largest deficit since Q4'08. The data are seasonally adjusted. The deficit in goods trade was fairly steady Q/Q but the services surplus held near the lowest level in two years. The surplus on primary income declined to the smallest in five years, but the deficit on secondary income deepened to roughly the greatest level since Q1'08. The current account deficit reading was deeper than the deficit of $119.8 billion expected in the Action Economics Forecast Survey.

The deficit on goods trade of $190.0 billion in Q3 was fairly steady Q/Q, but has grown from $169.6 billion in Q4'13. Exports declined 1.2% (-8.0% y/y) to nearly the lowest level in four years while imports eased 0.7% (-4.4% y/y). The deficit was little-changed from a year ago.

The surplus on services trade held fairly steady Q/Q at $56.3 billion from a downwardly revised $56.1 billion in Q1. It was smaller, however, than the $59.4 billion peak in Q2 of last year. Exports of services gained 0.8% (1.6% y/y), while imports of services increased 1.1% (3.2% y/y).

The surplus on primary income lessened to $46.1 billion in Q3, down from its peak of $61.7 billion one year ago.

Direct investment income declined 13.4% y/y while the surplus on portfolio income fell to its lowest level since Q1'14.

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* Q3'15 Q2'15 Q1'15 Y/Y 2014 2013 2012
Current Account Balance ($ Billion) -124.1 -111.1 -118.3 -97.9 -389.5 -376.8 -449.7
  Deficit % of GDP -2.8 -2.5 -2.7 -2.1 -2.2 -2.2 -2.8
 Balance on Goods ($ Billion) -190.0 -189.2 -192.2 -188.1 -741.5 -702.6 -741.1
  Exports -1.2% 0.5% -6.4% -8.0% 2.5% 1.9% 4.2%
  Imports -0.7% -0.2% -3.4% -4.4% 3.5% -0.4% 2.9%
 Balance on Services ($ Billion) 56.3 56.1 57.9 59.4 233.1 224.2 204.4
  Exports 0.8% -0.6% -0.5% 1.6% 3.3% 4.8% 4.6%
  Imports 1.1% 0.5% -1.0% 3.2% 3.0% 2.6% 3.7%
 Balance on Primary Income ($ Billion) 46.1 52.8 49.7 61.7 238.0 224.5 212.2
 Balance on Secondary Income ($ Billion) -36.6 -30.8 -33.8 -33.8 -119.2 -122.9 -125.1
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