The U.S. current account deficit narrowed less than expected to $124.1 billion during Q3'19 from a downwardly-revised $125.2 bil. in Q2'19 (was $128.2 bil.). The Action Economics Forecast Survey anticipated a $122.1 bil. deficit. As a percent of GDP, the deficit declined to 2.3% from an unrevised 2.4% in Q2, and a six-and-a-half year high 2.8% in Q4'2018.

The smaller deficit last quarter was the result of a $3.7 bil. decrease in the goods deficit, which was somewhat offset by a $1.9 bil. decline in the service surplus and a $0.6 bil. deterioration in the income surplus. Both goods exports and imports were down 0.2% and 0.7% respectively (-1.4% and -2.2% y/y). Four out of the seven major categories of goods trade improved, led by $3.5 and $2.4 bil. narrowing in the industrial supplies and vehicles balances. Meanwhile, the consumer goods deficit increased by $2.3 bil.

Services exports edged down 0.1% in Q3 (+2.6% y/y) while imports rose 1.1% (5.3% y/y). Five of the nine major services categories showed a worsening trade balance led by a $0.7 declines in both travel and intellectual property services surpluses.

The surplus on primary income increased to a record high $68.7 bil., though as a share of GDP it has hovered around 0.3% since 2012. Despite higher interest rates in the U.S. versus much of the rest of the world, the investment income balance rose to a record $72.1 bil. -- it has also been range-bound around 0.3% of GDP since 2012. The deficit on secondary income increased to $35.5 bil. near Q1's record $36.6 bil.

Balance of Payments data are in Haver's USINT database, with summaries available in USECON. The expectations figure is in the AS1REPNA database.