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Economy in Brief

U.S. Current Account Deficit Deteriorates in Q3'20
by Tom Moeller  December 18, 2020

• 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
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