• Current account deficit grows as exports & imports decline.

• Goods & services balances both deteriorate.

The U.S. current account deficit grew to $170.5 billion in Q2 2020 from $111.5 billion in Q1, revised from $104.2 billion. The Action Economics Forecast Survey anticipated a $159.0 billion deficit. As a percent of GDP, the deficit grew to 3.5%, it's deepest since Q4 2008.

The deficit in goods trade deteriorated to $219.3 billion as exports fell 28.4% (-29.7 y/y). All export categories realized significant declines led by a 58.9% drop (-61.6% y/y) in auto exports. Imports of goods also were off a sharp 14.6% (-20.0% y/y). Goods import declines were widespread with the largest being a 53.3% shortfall (-57.4% y/y) in auto imports.

Services exports declined 22.9% (-29.3% y/y) as travel exports weakened by two-thirds (-72.9% y/y). Export charges for the use of intellectual property fell 9.6% (-12.4% y/y. Imports of services weakened 25.9% (-31.5% y/y) reflecting an 89.7% drop (-92.6% y/y) in travel imports. Imports of charges for the use of intellectual property fell 12.8% (-6.6% y/y).

The surplus on primary income fell to $29.2 billion, the smallest since Q2 2009. Investment income receipts declined 18.4% (-27.3% y/y) while investment income payments weakened 11.7% (-21.0% y/y). The deficit on secondary income lessened slightly to $34.9 billion from its record $37.1 billion in Q1.

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