Recent Updates

  • Korea: MOTIE Trade (Sep)
  • US: Consumer Sentiment (Sep-final), Personal Income with Revisions (Aug)
  • US: Chicago PMI (Sep)
  • Belgium: Gross External Debt (Q2)
  • more updates...

Economy in Brief

U.S. Current Account Deficit Narrowed Slightly in Q4
by Sandy Batten  March 24, 2022

• Third largest quarterly deficit on record.

• Goods deficit widened to another record; services surplus widened slightly.

• Largest annual deficit in 2021 on record.

The U.S. current account deficit narrowed to $217.9 billion in Q4 2021 from an upwardly revised quarterly record of $219.9 billion (initially $214.8 billion) in Q3. This was the third largest quarterly deficit on record. The Action Economics Forecast Survey anticipated a $218.0 billion deficit. As a percent of GDP, the Q4 deficit narrowed to 3.63% from 3.79% (revised from 3.71%). For all of 2021, the deficit was a record $821.6 billion, up markedly from $616.2 billion in 2020.

The deficit in goods trade rose to a new record $283.4 billion in Q4 from a slightly downwardly revised $273.2 billion in Q3 (initially $274.8 billion) with exports up 7.1% q/q and imports rising 5.9% q/q. The quarterly rise in exports was led by a 11.6% q/q increase in exports of consumer goods excluding food and autos and a 10.3% q/q gain in auto exports. The quarterly gain in imports was led by an 8.9% q/q rise in imports of consumer goods excluding food and autos.

The surplus on services trade rebounded in Q4 after a sharp narrowing in Q3. It widened to $54.4 billion from a slightly downwardly revised $49.8 billion in Q3 (initially $49.9 billion). Services exports rose 5.5% q/q in Q4 while services imports increased 4.2%. Services exports were led by a 38.4% q/q jump in travel services as tourism revived. Services imports were led by a 9.8% q/q jump in transport imports, primarily sea freight imports, as inventories were being rebuilt.

The surplus on primary income widened to $44.2 billion in Q4 from $41.9 billion in Q3 and $38.7 billion in Q2. Investment income receipts gained 1.6% q/q, mainly reflecting a rise in investment income. Primary income payments edged up 0.9% q/q, mostly reflecting interest payments on long-term debt securities.

On the capital flow side of the ledger, the net US acquisition of foreign financial assets slowed sharply to $113.6 billion in Q3 from $448.6 billion in Q3 as new portfolio foreign investment actually declined in Q4. The net incurrence of US liabilities to foreigners also declined sharply to $224.4 billion in Q4 from $612.1 billion in Q3 with foreign net foreign purchases of US equities declining.

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

U.S. Balance of Payments SA Q4'21 Q3'21 Q2'21 2021 2020 2019
Current Account Balance ($ Billion) -217.9 -219.9 -196.4 -821.6 -616.1 -472.1
  As % of GDP -3.63 -3.79 -3.45 -3.57 -2.95 -2.21
 Balance on Goods ($ Billion) -283.4 -273.2 -267.7 -1,091.4 -922.0 -861.5
  Exports (% Chg) 7.1 1.0 7.0 23.3 -13.5 -1.5
  Imports (% Chg) 5.9 1.4 4.3 21.4 -6.5 -1.6
 Balance on Services ($ Billion) 54.5 49.8 62.8 230.0 245.3 285.2
  Exports (% Chg) 5.5 1.5 5.2 9.3 -19.5 1.7
  Imports (% Chg) 4.2 12.4 8.1 17.6 -22.1 4.8
 Balance on Primary Income ($ Billion) 44.2 41.9 38.7 174.9 188.5 231.9
 Balance on Secondary Income ($ Billion) -33.2 -38.4 -30.1 -135.2 -127.9 -127.7
close
large image