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Economy in Brief

U.S. Current Account Deficit Shrinks Dramatically
by Tom Moeller  December 19, 2017

The U.S. current account deficit narrowed sharply to $100.6 billion during Q3 2017 from $124.4 billion in Q2. It was the smallest deficit in three years. The Q3 deficit figure compared to $116.8 billion expected in the Action Economics Forecast Survey. As a percent of GDP, the deficit fell to 2.1%.

The smaller deficit last quarter was due to a shallower $195.3 billion deficit on goods trade. Goods exports strengthened 1.4% (4.6% y/y), but imports of goods eased slightly (+5.2% y/y). The surplus on services trade increased to $60.9 billion, but that remained smaller than the Q2'14 peak of $65.8 billion. Services exports improved 1.0% (2.7% y/y) while services imports gained 0.5% (5.3% y/y).

The surplus on primary income increased sharply to $57.0 billion, the largest surplus since Q4 2011. Exports rose 4.2% (14.7% y/y) while imports improved 1.6% (8.6% y/y). The deficit on secondary income shrank to $23.2 billion after deepening to a record $33.2 billion in Q2.

From the capital account, the surplus on foreign direct investment shrank to $76.7 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 Q3'17 Q2'17 Q1'17 Q3'16 2016 2015 2014
Current Account Balance ($ Billion) -100.6 -124.4 -113.5 -110.3 -451.7 -434.6 -373.8
  Deficit % of GDP -2.1 -2.6 -2.4 -2.4 -2.4 -2.3 2.3
 Balance on Goods ($ Billion) -195.3 -201.4 -200.6 -183.4 -752.5 -761.9 -751.5
  Exports 1.4% -0.2% 3.6% 4.6% -3.6% -7.5% 2.6%
  Imports -0.2% 0.0% 3.3% 5.2% -2.8% -4.7% 4.0%
 Balance on Services ($ Billion) 60.9 59.7 62.5 62.5 247.7 261.4 261.2
  Exports 1.0 0.2% 1.7% 2.7% -0.1% 1.5% 5.8%
  Imports 0.5 2.4% 1.3% 5.3% 2.6% 2.3% 4.3%
 Balance on Primary Income ($ Billion) 57.0 50.5 50.1 41.1 173.2 181.0 210.8
 Balance on Secondary Income ($ Billion) -23.2 -33.2 -25.5 -30.5 -120.1 -115.1 -94.2
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