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Economy in Brief

U.S. Current Account Deficit Sets Record in Q1'21
by Tom Moeller  June 23, 2021

• Goods trade deficit widens sharply.

• Services trade surplus shrinks to least since 2012.

The U.S. current account deficit deepened to $195.7 last quarter from $175.1 billion in Q4'20, revised from $188.5 billion. The Action Economics Forecast Survey anticipated a $207.0 billion deficit. As a percent of GDP, the deficit grew to 3.6%, it's deepest since Q4'08. During all of 2020, the current account deficit deepened to $616.1 billion, revised from $647.2 billion.

The deficit in goods trade deteriorated to a record $268.5 billion as exports grew 6.4% (2.6% y/y) in Q1. Industrial supplies & materials exports rose 12.8% (4.0% y/y). Food, feeds & beverage exports increased 4.5% (21.9% y/y and capital goods exports rose 4.2% (-7.0% y/y). Falling by 2.5% (-1.0% y/y) were auto, parts & engines exports while nonauto consumer goods exports declined 1.1% (3.0% y/y). Imports of goods rose 6.3% (13.1% y/y) in Q1. The gain reflected a 19.1% rise (12.2% y/y) in industrial supplies & materials imports as oil prices rose. Nonauto consumer goods imports gained 7.4% (24.8% y/y). Capital goods imports strengthened 5.8% (13.2% y/y) while foods, feeds & beverage imports rose 2.9% (6.8% y/y). Falling 6.2% (2.6% y/y) were auto & parts imports.

The surplus on services trade narrowed to $55.7 billion in Q1. Services exports rose 0.6% (-11.7% y/y) as travel exports strengthened 12.2% (-63.1% y/y). Export charges for the use of intellectual property weakened 7.1% (+1.7% y/y). Imports of services improved 1.5% (-9.8% y/y), reflecting a 5.1% rise (-64.2% y/y) in travel imports in Q4. Imports of charges for the use of intellectual property increased 4.2% (14.8% y/y).

The surplus on primary income fell to $50.3 billion after increasing sharply in Q4'20. Investment income receipts rose 3.8% (3.3% y/y) while investment income payments increased 6.9% (4.8% y/y). The deficit on secondary income grew to $33.3 billion.

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 Q1'21 Q4'20 Q3'20 2020 2019 2018
Current Account Balance ($ Billion7 -195.7 -175.1 -172.4 -616.1 -472.1 -438.2
  As % of GDP -3.6 -3.3 -3.3 -2.9 -2.2 -2.1
 Balance on Goods ($ Billion) -268.5 -253.1 -245.4 -922.0 -861.5 -878.7
  Exports (% Chg) 6.4 7.6 23.1 -13.5 -1.5 7.7
  Imports (% Chg) 6.3 5.8 17.4 -6.5 -1.6 8.5
 Balance on Services ($ Billion) 55.7 56.3 58.3 245.3 285.2 297.8
  Exports (% Chg) 0.6 5.0 0.7 -19.5 1.7 3.4
  Imports (% Chg) 1.5 9.5 7.6 -22.1 4.8 3.1
 Balance on Primary Income ($ Billion) 50.3 54.2 48.3 188.5 231.9 259.1
 Balance on Secondary Income ($ Billion) -33.3 -32.5 -33.5 -127.9 -127.7 -116.4
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