Global| Jun 18 2008U.S. Current Account Deficit Slightly Deeper in 1Q'08
by:Tom Moeller
|in:Economy in Brief
Summary
During 1Q'08, the US current account deficit deepened slightly to $176.4 billion from a revised $167.2 billion during last year's final quarter. The Q1 deficit was deeper than the Consensus expectation for a figure of $173 billion. [...]
During 1Q'08, the US current account deficit deepened slightly to $176.4 billion from a revised $167.2 billion during last year's final quarter. The Q1 deficit was deeper than the Consensus expectation for a figure of $173 billion.
The deepening pulled the deficit to 5.0% of GDP. That percentage has been fairly stable during the last three quarters and it is much reduced from its peak percentage late in 2005, of 6.5% of GDP.
During 1Q, the deficit on goods trade deepened slightly to $211.0 billion as higher oil prices raised imports by 3.3%. That increase was enough to deepen the deficit even though exports rose by a stronger 4.8% because imports are the greater total. The deficit on goods trade has been fairly steady near $200 billion since late-2005.
The effects of the lower U.S. dollar and the strength of foreign economies versus the U.S. continued to be apparent in the surplus in services trade. It grew to a record $36.1B, and prior figures were revised to show a larger surplus. Exports of travel services grew 23.1% y/y and passenger fares were up 23.9%, after a very much upwardly revised 30.9% y/y 4Q increase. Imports grew 28.9% but travel imports grew 73.4%. They have nearly doubled y/y while passenger fares grew 9.3% (19.8% y/y).
The trade surplus on earned income narrowed to $29.8B as the unilateral transfers deficit deepened to $31.2 billion.
From the capital account, the deficit on private direct investment narrowed to $39.0 billion from $52.7 billion in 1Q '07 as the level of foreign investment more than tripled versus the year earlier level.Challenges for Health-Care Reform is yesterday's speech by Federal Reserve Board Chairman Ben S. Bernanke and it can be found here
| US Balance of Payments, Bil.$, SA | 1Q '08 | 4Q '07 | Year Ago | 2007 | 2006 | 2005 |
|---|---|---|---|---|---|---|
| Current Account Balance ($ Bil.) | -176.4 | -167.2 | -196.9 | -731.2 | -788.1 | -729.0 |
| Deficit % of GDP | -5.0 | -4.8 | -5.8 | -5.3 | -6.0 | -5.9 |
| Balance on Goods ($ Bil.) | -211.0 | -208.9 | -203.3 | -819.4 | -838.3 | -787.1 |
| Exports | 4.8% | 2.6% | 17.6% | 12.3% | 14.4% | 10.8% |
| Imports | 3.3% | 3.1% | 11.6% | 5.7% | 10.7% | 13.9% |
| Balance on Private Services ($ Bil.) | 36.1 | 35.1 | 23.8 | 119.1 | 85.0 | 75.6 |
| Exports | 4.4% | 4.9% | 15.2% | 13.4% | 8.8% | 11.1% |
| Imports | 3.3% | 0.9% | 9.9% | 8.4% | 11.3% | 7.7% |
| Balance on Income ($ Bil.) | 29.8 | 36.3 | 12.9 | 81.8 | 57.2 | 67.2 |
| Unilateral Transfers ($ Bil.) | -31.2 | -29.8 | -30.2 | -112.7 | -92.0 | -89.8 |
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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