• 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.