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Economy in Brief

U.S. Current Account Deficit Widens
by Tom Moeller  June 20, 2018

The U.S. current account deficit rose to $124.1 billion during Q1 2018 from $116.1 billion in Q4 2017. It was the largest deficit since Q4 2008. The Q1 deficit compared to $129.0 billion expected in the Action Economics Forecast Survey. As a percent of GDP, the deficit grew to 2.5%. During all of last year, the current account deficit deepened to $449.1 billion, the largest since 2008. Data back to 2013 were revised.

The larger deficit last quarter was due to a deeper $220.5 billion shortfall on goods trade. A 2.4% increase in goods exports was slower than a 2.9% rise in imports. During the last four quarters, goods exports rose 7.9%. Imports rose 9.1% y/y, the largest increase since 2011.

The surplus on services trade increased slightly to $64.9 billion, but that remained smaller than the Q1'15 peak of $67.6 billion in Q1 2015. Services exports rose 1.9% while services imports gained 2.5%. During the last four quarters, services exports increased 6.5%. Exports of intellectual property rights rose 7.2% y/y while travel exports increased 3.6% y/y. Services imports gained 8.5% y/y. Charges for intellectual property increased 27.2% y/y and travel imports rose 8.7%.

The surplus on primary income was fairly steady at the record $62.0 billion The deficit on secondary income also was steady at $30.5 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 Q1'18 Q4'17 Q3'17 Q4'16 2017 2016 2015
Current Account Balance ($ Billion) -124.1 -116.1 -103.4 -107.7 -449.1 -432.9 -407.8
  Deficit % of GDP -2.5 -2.4 -2.1 -2.3 -2.3 -2.3 -2.3
 Balance on Goods ($ Billion) -220.5 -212.4 -196.8 -198.3 -807.5 -751.1 -761.9
  Exports 2.4% 3.6% 1.4% 2.7% 6.6% -3.6% -7.6%
  Imports 2.9% 5.1% 0.4% 2.5% 6.9% -1.9% -4.7%
 Balance on Services ($ Billion) 64.9 64.6 64.0 63.4 255.2 249.1 263.3
  Exports 1.9% 1.3% 2.0% 2.1% 5.1% 0.5% 1.9%
  Imports 2.5% 1.6% 2.4% 1.4% 6.4% 3.6% 2.3%
 Balance on Primary Income ($ Billion) 62.0 62.4 58.2 52.6 221.7 193.0 203.7
 Balance on Secondary Income ($ Billion) -30.5 -30.7 -28.9 -25.4 -118.6 -123.9 -112.8
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