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Economy in Brief
Chicago Fed National Activity Index Improves in April
The Chicago Fed National Activity Index (CFNAI) rose to 0.47 during April...
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Despite the recent improvement in U.S. factory output, many industrial commodity prices have weakened...
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Of these 13 readings eight of them declined on the month in May three of them improved and two of them were unchanged...
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Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
Profits & Margins Plunge In Q1: Expect More Margin Contraction As Fed Squeezes Inflation
The Many Links of Inflation Cycle: Hard Landing Is Needed to Crack Them
Peak Inflation and Fed Policy: A Relationship which Should Worry the Fed and Scare Investors
Why Have the Yields on TIPS Been Negative in the Past Two Years?
by Tom Moeller December 17, 2007
The US current account deficit fell further last quarter to $178.5 billion from $188.9 billion in Q2, a figure that was revised slightly shallower. The Q3 deficit was shallower than Consensus expectations for a deficit of $183.3 billion.
The latest deficit totaled 5.1% of GDP and it peaked as a percentage of GDP nearly two years ago at 6.8% in Q4 2005.
That shrinkage occurred as the deficit on merchandise trade improved slightly $199.7B from Q2's deficit of $204.2B and from its deepest shortfall a year ago of $219.9B During the last year only, exports grew 10.0% and outpaced the 4.4% y/y growth in imports.
The effects of the lower U.S. dollar and the strength of foreign economies versus the U.S. is apparent most decisively in the surplus in services trade. It improved markedly to a record surplus of $26.5B from $25.8B in 2Q. Exports of services during the last year alone grew 14.3%. Travel exports grew 17.7% y/y, passenger fares were up 10.9% and freight shipping grew 11.3%. Import growth, conversely was contained to 9.2% due to moderate 7.7% growth in travel, 4.8% growth in passenger fares and a slight 1.4% advance in private freight transportation.
Foreign trade zones from the Federal Reserve Bank of Minneapolis can be found here.
| US Balance of Payments, Bil.$, SA |
Q3 2007 | Q2 2007 | Year Ago | 2006 | 2005 | 2004 |
|---|---|---|---|---|---|---|
| Current Account Balance ($ Bil.) | -178.5 | -188.9 | -217.3 | -811.5 | -754.8 | -640.2 |
| Deficit % of GDP | -5.1 | -5.5 | -6.6 | -6.2 | -6.1 | -5.5 |
| Balance on Goods ($ Bil.) | -199.7 | -204.2 | -218.9 | -838.3 | -787.1 | -669.6 |
| Exports | 3.5% | 1.2% | 11.0% | 12.7% | 10.9% | 13.7% |
| Imports | 2.4% | 0.9% | 4.4% | 10.4% | 12.9% | 16.8% |
| Balance on Private Services ($ Bil.) | 26.5 | 25.8 | 19.6 | 79.8 | 72.8 | 57.5 |
| Exports | 2.4% | 5.1% | 14.3% | 9.9% | 10.5% | 14.7% |
| Imports | 2.2% | 3.1% | 9.2% | 9.3% | 8.7% | 16.8% |
| Balance on Income ($ Bil.) | 20.5 | 12.7 | 5.9 | 36.6 | 48.1 | 56.4 |
| Unilateral Transfers ($ Bil.) | -25.8 | -23.2 | -23.9 | -89.6 | -88.5 | -88.4 |
