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Economy in Brief

U.S. Current Account Deficit Narrows
by Tom Moeller  September 16, 2016

The U.S. current account deficit eased to $119.9 billion in the second quarter from $131.8 billion Q1'16, revised from -$124.7 billion. The Q2 deficit figure compared to $121.9 billion expected in the Action Economics Forecast Survey. The deficit has been trending sideways since early last year. As a percent of GDP, the deficit last quarter of 2.6% was less than half the size in late 2006.

The modest narrowing in the deficit last quarter was due to a 0.5% rise in services exports (-1.5% y/y) which outpaced the 0.4% gain in imports (+2.1% y/y). The surplus on services trade has nevertheless fallen to $61.5 billion from its peak of $67.0 billion in Q1'15. The balance on merchandise trade has been trending sideways, last quarter to $186.7 billion. Exports rose 1.7% (-6.2% y/y) and imports gained 1.2% (-4.8% y/y). The surplus on primary income fell sharply to $42.9 billion from its Q4'13 peak of $57.2 billion. The deficit on secondary income has been trending lower since early 2014.

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 Q2'16 Q1'16 Q4'15 Y/Y 2015 2014 2013
Current Account Balance ($ Billion) -119.9 -131.8 -113.4 -111.9 -463.0 -392.1 -366.4
  Deficit % of GDP 2.6 2.9 2.5 2.5 2.6 2.3 2.2
 Balance on Goods ($ Billion) -186.7 -186.3 -188.4 -190.9 -762.6 -752.2 -702.2
  Exports 1.7% -3.0% -3.2% -6.2% -7.5% 2.6% 1.9%
  Imports 1.2% -2.4% -2.3% -4.8% -4.7% 4.0% -0.4%
 Balance on Services ($ Billion) 61.5 61.1 64.2 66.8 262.2 262.0 240.4
  Exports 0.5% -1.2% -0.1% -1.5% 1.0% 6.0% 6.9%
  Imports 0.4% 0.7% -0.2% 2.1% 1.5% 4.4% 2.0%
 Balance on Primary Income ($ Billion) 42.9 34.0 47.1 45.1 182.4 224.0 219.0
 Balance on Secondary Income ($ Billion) -37.6 -40.6 -36.3 -32.9 -145.0 -125.9 -123.5
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