• Goods trade deficit sets record in 2020.

• Services trade surplus declines to eight-year low.

The U.S. current account deficit deepened to $188.5 billion during Q4'20 following a widening to $180.9 billion in Q3'20, revised from $178.5 billion. The Action Economics Forecast Survey anticipated a $188.0 billion deficit. As a percent of GDP, the deficit grew slightly to 3.5%, it's deepest since Q4'08. During all of 2020, the current account deficit deepened to $647.2 billion from $480.2 billion.

The deficit in goods trade deteriorated to $253.0 billion as exports grew 8.7% (-5.8% y/y) in Q4. All export categories increased. Capital goods exports rose 5.7% (-12.9% y/y) and auto exports increased 4.8% (-3.9% y/y). Exports of nonauto consumer goods increased 8.9% (-1.7% y/y) while foods, feeds & beverage exports grew 15.1% (24.6% y/y). Imports of goods rose 6.0% (4.3% y/y) in Q4. The gain reflected a 12.8% increase (7.8% y/y) in auto imports and a 5.6% rise (4.0% y/y) in capital goods imports. Nonauto consumer goods import improved 6.1% (13.7% y/y) but foods, feeds & beverage imports eased 0.2% (+6.9% y/y).

The surplus on services trade narrowed to $53.0 billion in Q4. Services exports rose 2.3% (-24.0% y/y) as travel exports strengthened 18.2% (-73.5% y/y). Export charges for the use of intellectual property improved 4.2% (0.1% y/y). Imports of services strengthened 6.3% (-22.4% y/y), reflecting a 70.5% rise (-79.6% y/y) in travel imports in Q4. Imports of charges for the use of intellectual property increased 0.6% (-3.1% y/y).

The surplus on primary income rose to $47.9 billion after increasing sharply in Q3. Investment income receipts rose 3.0% (-12.2% y/y) while investment income payments increased 3.7% (-9.1% y/y). The deficit on secondary income narrowed slightly to $36.4 billion after deteriorating to a record $37.7 billion in Q3.

Balance of Payments data are in Haver's USINT database, with summaries available in USECON. The expectations figure is in the AS1REPNA database.