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Economy in Brief

U.S. Current Account Deficit Declines
by Tom Moeller  September 19, 2018

The U.S. current account deficit fell to $101.5 billion during Q2 2018 from $121.7 billion in Q1. It was the smallest deficit since Q4 2015 and compared to $103.5 billion expected in the Action Economics Forecast Survey. As a percent of GDP, the deficit declined to 2.0% from 2.4%.

The smaller deficit last quarter was partly due to a shallower $203.2 billion shortfall on goods trade. Goods exports increased 4.3%, while goods imports held steady. 

Additionally, the surplus on services trade increased to a record $69.3 billion. Services exports rose 1.5%. Telecommunications, computer & information services exports gained 2.5% (8.2% y/y). Exports of intellectual property rights rose 1.8% (6.1% y/y) while travel exports rose 0.6% (2.7% y/y). Services imports gained 0.4%. Charges for intellectual property declined 1.5% (-11.5% y/y) and travel imports increased 0.1% (6.2% y/y). Telecommunications, computer & information services imports rose 1.7% (5.5% y/y).

The surplus on primary income eased to $60.8 billion, but remained near the record high. The deficit on secondary income also slipped to $28.5, and remained narrower y/y.

From the capital account, the deficit on foreign direct investment shrank to $29.1 billion. This year's deficits compare to surpluses through most of the post-war period.

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 Q2'18 Q1'18 Q4'17 2017 2016 2015
Current Account Balance ($ Billion) -101.5 -121.7 -116.1 -449.1 -432.9 -409.8
  Deficit % of GDP -2.0 -2.4 -2.3 -2.3 -2.3 -2.2
 Balance on Goods ($ Billion) -203.2 -220.8 -212.4 -807.5 -751.1 -761.9
  Exports 4.3% 2.4% 3.6% 6.6% -3.6% -7.6%
  Imports 0.0% 2.9% 5.1% 6.9% -2.9% -4.7%
 Balance on Services ($ Billion) 69.3 66.8 64.6 255.2 249.1 263.3
  Exports 1.5% 1.0% 1.3% 5.1% 0.5% 1.9%
  Imports 0.4% -0.2% 1.6% 6.4% 3.6% 2.3%
 Balance on Primary Income ($ Billion) 60.8 61.2 62.4 221.7 193.0 203.6
 Balance on Secondary Income ($ Billion) -28.5 -28.9 -30.7 -118.6 -123.9 -112.8
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