Global| Jun 16 2006U.S. Current Account Deficit Narrowed Unexpectedly
by:Tom Moeller
|in:Economy in Brief
Summary
The US current account deficit narrowed last quarter to $208.7B versus a revised record during 4Q '05 of $223.1B. The deficit during 1Q '06 equaled 6.4% of GDP, about stable with 6.3% for all of last year . Consensus expectations had [...]
The US current account deficit narrowed last quarter to $208.7B versus a revised record during 4Q '05 of $223.1B. The deficit during 1Q '06 equaled 6.4% of GDP, about stable with 6.3% for all of last year .
Consensus expectations had been for a 1Q deficit of $222.0B. Much of the surprise was narrowing of the unilateral transfers deficit to $19.9B from $26.2B during 4Q '05.
The deficit in merchandise trade improved to $208B from the record $212.5B in 4Q which was little revised. Exports jumped another 5.0% (14.2% y/y) while imports grew just 1.6% (13.8% y/y).
The surplus in services trade fell slightly to $17.2B from an upwardly revised $17.7B surplus during 4Q. Exports of services grew 1.9% (8.4% y/y) while imports grew 3.0% (7.3% y/y), the strongest quarterly growth since 4Q '04.
From the capital account, net US foreign direct investment abroad fell sharply to $61.8B, its weakest since 4Q '04. Foreign direct investment in the US, however, rose to $33.3B (9.0% y/y).
Energy and the Economy, yesterday's speech by Fed Chairman Ben S. Bernanke, is available here.
| US Int'l Balance of Payments | 1Q 06 | 4Q '05 | Y/Y | 2005 | 2004 | 2003 |
|---|---|---|---|---|---|---|
| Current Account Deficit | $208.7 | $223.1B | $191.7B (1Q05) | $791.5B | $665.3B | $527.5B |
| Goods/Services/Income Deficit | $188.8 | $196.9B | $164.5B | $705.4B | $583.7B | $458.3B |
| Exports | 5.0% | 4.4% | 16.9% | 14.6% | 15.7% | 5.9% |
| Imports | 2.3% | 6.9% | 16.3% | 16.3% | 18.7% | 7.4% |
| Unilateral Transfers Deficit | $19.9B | $26.2B | $27.2B | $86.1B | $81.6B | $69.2B |
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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