Global| Sep 14 2006U.S. Current Account Deficit Eases in Q2
Summary
The US current account deficit shrank a bit in Q2 to $190.8 billion from $197.1 billion in Q1. The figure was very close to consensus expectations for Q2 of $190.5 billion. Q1's deficit was revised larger by $4.5 billion. The latest [...]
The US current account deficit shrank a bit in Q2 to $190.8 billion from $197.1 billion in Q1. The figure was very close to consensus expectations for Q2 of $190.5 billion. Q1's deficit was revised larger by $4.5 billion.
The latest deficit equaled 5.5% of GDP, down from 5.8% in Q1 and 6.2% for all of 2006.
The deficit in merchandise trade deteriorated slightly to $204.2B from Q1's deficit of $200.9B. Exports grew $9.2B in the quarter, equal to 3.4% (10.6% y/y). Imports increased 2.7% (4.3% y/y), but since imports are far larger, that is a $12.6B increase.
The surplus in services trade improved by $3.2B in the quarter to $26.5B, a new record. The previous high was $25.0B in Q4 1996. All major service sector categories contributed: more foreign tourists, less American use of foreign airlines, an increase in net private services, a gain in net royalties and fees and so on.
The U.S. capital account widened marginally in Q2 to $589 million, although this is noticeably smaller than the year-earlier $1.0 billion. Among the financial accounts, the net inflow of direct investment funds was $2.1B, a sharp turnaround from Q1's outsized outflow, $69.5B. Other private financial assets saw a net inflow of $79.2B, slightly less than $84.0B in Q1.
| US Balance of Payments, Bil.$, SA |
Q2 2007 | Q1 2007 | Q4 2006 | Year Ago | 2006 | 2005 | 2004 |
|---|---|---|---|---|---|---|---|
| Current Account Deficit | -190.8 | -197.1 | -187.9 | -205.6 | -811.5 | -754.8 | -640.2 |
| Goods & Services | -177.7 | -177.6 | -176.9 | -192.6 | -758.5 | -714.4 | -612.2 |
| Exports % change | 3.5% | 1.2% | 3.2% | 11.0% | 12.7% | 10.9% | 13.7% |
| Imports % change | 2.4% | 0.9% | -1.9% | 4.4% | 10.4% | 12.9% | 16.8% |
| Income (Bil.$) | +9.4 | +7.5 | +9.7 | +10.7 | +36.6 | +48.1 | +56.4 |
| Unilateral Transfers | -22.5 | 27.0 | 20.7 | 23.7 | 89.6 | 88.5 | 88.4 |
Carol Stone, CBE
AuthorMore in Author Profile »Carol Stone, CBE came to Haver Analytics in 2003 following more than 35 years as a financial market economist at major Wall Street financial institutions, most especially Merrill Lynch and Nomura Securities. She has broad experience in analysis and forecasting of flow-of-funds accounts, the federal budget and Federal Reserve operations. At Nomura Securites, among other duties, she developed various indicator forecasting tools and edited a daily global publication produced in London and New York for readers in Tokyo. At Haver Analytics, Carol is a member of the Research Department, aiding database managers with research and documentation efforts, as well as posting commentary on select economic reports. In addition, she conducts Ways-of-the-World, a blog on economic issues for an Episcopal-Church-affiliated website, The Geranium Farm. During her career, Carol served as an officer of the Money Marketeers and the Downtown Economists Club. She has a PhD from NYU's Stern School of Business. She lives in Brooklyn, New York, and has a weekend home on Long Island.
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