Global| Dec 18 2020U.S. Current Account Deficit Deteriorates in Q3'20
by:Tom Moeller
|in:Economy in Brief
Summary
• Jump in imports substantially deepens the goods deficit. • Services surplus declines to eight-year low. The U.S. current account deficit grew to $178.5 billion during Q3'20 from $161.4 billion in Q2, revised from $170.5 billion. The [...]
• Jump in imports substantially deepens the goods deficit.
• Services surplus declines to eight-year low.
The U.S. current account deficit grew to $178.5 billion during Q3'20 from $161.4 billion in Q2, revised from $170.5 billion. The Action Economics Forecast Survey anticipated a $188.0 billion deficit. As a percent of GDP, the deficit grew slightly to 3.4%, it's deepest since Q4'08.
The deficit in goods trade deteriorated to 245.6 billion as exports grew 23.7% (-13.1% y/y). All export categories posted significant increases including a 12.8% rise (-17.2% y/y) in capital goods exports and a 137.3% jump (-10.8% y/y) in auto exports. Exports of nonauto consumer goods increased 34.8% (-12.3% y/y) while foods, feeds & beverage exports grew 10.2% (3.5% y/y). Imports of goods rose 18.6% (-4.6% y/y). The gain reflected a 109.1% increase (-10.0% y/y) in auto imports and a 13.1% rise (-2.6% y/y) in capital goods imports. Nonauto consumer goods import improved 19.7% (0.5% y/y) and foods, feeds & beverage imports rose 8.8% (4.5% y/y).
The surplus on services trade narrowed to $57.2 billion. Services exports rose 1.8% (-24.8% y/y) as travel exports weakened by 14.0% (-76.7% y/y). Export charges for the use of intellectual property improved 11.5% (2.5% y/y). Imports of services strengthened 6.5% (-27.1% y/y), reflecting a 78.3% rise (-86.8% y/y) in travel imports. Imports of charges for the use of intellectual property increased 29.0% (9.7% y/y).
The surplus on primary income rose to $48.1 billion after falling sharply in Q2. Investment income receipts rose 12.7% (-16.8% y/y) while investment income payments increased 6.6% (-15.2% y/y). The deficit on secondary income deteriorated to a record $38.2 billion.
Balance of Payments data are in Haver's USINT database, with summaries available in USECON. The expectations figure is in the AS1REPNA database.
| US Balance of Payments SA | Q3'20 | Q2'20 | Q1'20 | 2019 | 2018 | 2017 |
|---|---|---|---|---|---|---|
| Current Account Balance ($ Billion) | -178.5 | -161.4 | -111.5 | -480.2 | -449.7 | -365.3 |
| Deficit % of GDP | -3.4 | -3.3 | -2.1 | -2.2 | -2.2 | -1.9 |
| Balance on Goods ($ Billion) | -245.6 | -219.5 | -191.7 | -864.3 | -880.3 | -799.3 |
| Exports (% Chg) | 23.7 | -28.5 | -1.9 | -1.5 | 7.7 | 6.8 |
| Imports (% Chg) | 18.6 | -14.6 | -3.0 | -1.6 | 8.5 | 6.8 |
| Balance on Services ($ Billion) | 57.2 | 60.9 | 65.3 | 287.5 | 300.4 | 285.6 |
| Exports (% Chg) | 1.8 | -19.8 | -8.6 | 1.6 | 3.9 | 6.4 |
| Imports (% Chg) | 6.5 | -26.0 | -7.8 | 4.7 | 3.2 | 6.4 |
| Balance on Primary Income ($ Billion) | 48.1 | 33.2 | 52.0 | 236.3 | 251.2 | 257.8 |
| Balance on Secondary Income ($ Billion) | -38.2 | -35.9 | -37.1 | -139.7 | -120.9 | -109.3 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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