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Economy in Brief

U.S. Current Account Deficit Narrows in Q4 as Goods Imports Fall More Than Exports
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
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