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Economy in Brief

U.S. Current Account Deficit Continues to Increase
by Tom Moeller  March 27, 2019

The U.S. current account deficit widened to $134.4 billion during Q4'18 from $126.6 billion in Q3. It remained the largest quarterly deficit since Q4 2008 and compared to $131.1 billion expected in the Action Economics Forecast Survey. As a percent of GDP, the deficit deepened to 2.6% from 2.5% in Q3, its largest deficit since Q2 2012.

The larger deficit last quarter was due to a record $233.0 billion shortfall on goods trade. Goods exports declined 0.9% (+3.5% y/y), while goods imports held steady (5.7% y/y).

The surplus on services trade eased to $66.1 billion from the record $67.5 billion in Q3. Services exports rose 1.0% after a 0.7% rise. Telecommunications, computer & information services exports gained 0.8% (3.3% y/y) after a 5.0% jump. Exports of intellectual property rights were little changed (-1.5% y/y) after declining in the prior two quarters while travel exports improved 1.1% (1.0% y/y). Services imports gained 2.5% (2.7% y/y) after a 1.9% rise. Charges for intellectual property eased 0.8% (-3.4% y/y) and travel imports strengthened 5.4% (7.6% y/y). Telecommunications, computer & information services imports held steady (-0.7% y/y).

The surplus on primary income was little changed at $60.4 billion, down versus the record high of $62.4 billion reached in Q4'17. The deficit on secondary income widened to $27.8 billion after narrowing since Q2'17.

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 Q4'18 Q3'18 Q2'18 2018 2017 2016
Current Account Balance ($ Billion) -134.4 -126.6 -103.6 -488.5 -449.1 -432.9
  Deficit % of GDP 2.6 2.5 2.0 2.4 2.3 2.3
 Balance on Goods ($ Billion) -233.1 -229.5 -205.5 -8913 -807.5 -751.1
  Exports -0.9% -1.8% 4.4% 7.7% 6.6% -3.6%
  Imports -0.0% 2.6% 0.0% 8.6% 6.9% -2.9%
 Balance on Services ($ Billion) 66.1 67.5 68.7 269.2 255.2 249.1
  Exports 1.0% 0.7% -0.1% 3.9% 5.1% 0.5%
  Imports 2.5% 1.9% -1.3% 3.1% 6.4% 3.6%
 Balance on Primary Income ($ Billion) 60.4 60.3 62.3 244.3 221.7 193.0
 Balance on Secondary Income ($ Billion) -27.8 -24.9 -29.0 -110.7 -118.6 -123.9
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