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Economy in Brief

U.S. Current Account Deficit Widens in Q4'20
by Tom Moeller  March 23, 2021

• 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.

U.S. Balance of Payments SA Q4'20 Q3'20 Q2'20 2020 2019 2018
Current Account Balance ($ Billion) -188.5 -180.9 -163.2 -647.2 -480.2 -449.7
  As % of GDP -3.5 -3.4 -3.4 -3.1 -2.2 -2.2
 Balance on Goods ($ Billion) -253.0 -247.5 -221.5 -915.6 -864.3 -880.3
  Exports (% Chg) 8.7 23.8 -28.5 -13.2 -1.5 7.7
  Imports (% Chg) 6.0 18.5 -14.6 -6.6 -1.6 8.5
 Balance on Services ($ Billion) 53.0 56.1 60.8 233.9 287.5 300.4
  Exports (% Chg) 2.3 1.6 -18.3 -21.0 1.6 3.9
  Imports (% Chg) 6.3 7.2 -24.6 -22.1 4.7 3.2
 Balance on Primary Income ($ Billion) 47.9 48.2 33.3 181.6 236.3 251.2
 Balance on Secondary Income ($ Billion) -36.4 -37.7 -35.9 -147.1 -139.7 -120.9
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