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Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Gerald D. Cohen March 19, 2020
• Current account deficit narrowed to $109.8 billion, led by a decrease in the goods deficit.
• Balance on services and income roughly unchanged.
The U.S. current account deficit narrowed to $109.8 billion during Q4'19 from an upwardly-revised $125.4 bil. in Q3'19 (was $124.1 bil.). The Action Economics Forecast Survey anticipated a $109 bil. deficit. As a percent of GDP, the deficit declined to 2.0% from an unrevised 2.3% in Q3, and a six-and-a-half year high 2.8% in Q4'2018. This is the smallest deficit as a share of GDP since Q3'2017.
The smaller deficit last quarter was the result of a $18.1 bil. improvement in the goods deficit, with the services surplus growing $0.5 bil., and income deteriorating by $3.0 bil. Goods imports fell more than exports, -3.3% versus -0.6% (-5.7% and -1.7% year-on-year respectively). Four out of the seven major categories of goods trade improved, led by $10.0 and $5.9 bil. gains in the consumer goods and industrial supplies balances. Meanwhile, the food deficit increased by $1.7 bil.
Services exports grew 1.3% while imports rose 1.6% (3.5% and 3.7% respectively). Four of the major services categories improved while five deteriorated.
The surplus on primary income increased to a record high $67.3 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 $70.8 bil. -- it has also been range-bound around 0.3% of GDP since 2012. The deficit on secondary income increased to a record $37.3 bil.
Balance of Payments data are in Haver's USINT database, with summaries available in USECON. The expectations figure is in the AS1REPNA database.
US Balance of Payments SA | Q4'19 | Q3'19 | Q2'19 | 2019 | 2018 | 2017 |
---|---|---|---|---|---|---|
Current Account Balance ($ Billion) | -109.8 | -125.4 | -126.3 | -498.4 | -491.0 | -439.6 |
Deficit % of GDP | -2.0 | -2.3 | -2.4 | -2.3 | -2.4 | -2.3 |
Balance on Goods ($ Billion) | -202.8 | -220.9 | -224.5 | -866.2 | -887.3 | -805.2 |
Exports (% Chg) | -0.6 | -0.2 | -1.1 | -1.3 | 7.8 | 6.6 |
Imports (% Chg) | -3.3 | -0.7 | 0.3 | -1.7 | 8.6 | 6.9 |
Balance on Services ($ Billion) | 62.9 | 62.5 | 64.1 | 249.8 | 259.7 | 255.1 |
Exports (% Chg) | 1.3 | -0.5 | 2.1 | 2.2 | 3.5 | 5.3 |
Imports (% Chg) | 1.6 | 0.4 | 0.4 | 5.0 | 4.3 | 6.3 |
Balance on Primary Income ($ Billion) | 67.3 | 65.9 | 66.8 | 257.0 | 254.0 | 225.8 |
Balance on Secondary Income ($ Billion) | -37.3 | -32.9 | -32.6 | -138.9 | -117.3 | -115.3 |