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Economy in Brief

U.S. Current Account Deficit Narrows Q/Q, Yet Deepens for the Year
by Tom Moeller  March 21, 2017

The U.S. current account deficit declined to $112.4 billion during last year's fourth quarter from $116.0 billion in Q3'16. The Q4 deficit figure compared to $128.2 billion expected in the Action Economics Forecast Survey. The latest quarterly deficit was the smallest since Q2'15. For all of last year, the deficit increased to $481.2 billion from $463.0 billion in 2015. As a percent of GDP, the deficit last quarter of 2.4% was less than half the size in late 2006.

The narrowing in the deficit last quarter was due primarily to a near record trade surplus on primary income of $61.5 billion. The deficit on secondary income was stable q/q, but has trended lower. In addition, the surplus on services trade increased to $63.8 billion as exports rose 1.0% and imports increased 0.4%. Nevertheless, the surplus on services trade for the year eased to $249.4 billion as imports rose 2.9% and exports remained little changed. The balance on merchandise trade deepened last quarter to $196.1 billion. Exports eased 0.9% (+1.8% y/y) and imports strengthened 2.5% (2.6% y/y) as oil prices increased. For the year, the merchandise trade deficit eased to $$749.9 billion, its smallest since 2013.

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 Q4'16 Q3'16 Q2'16 Q4'15 2016 2015 2014
Current Account Balance ($ Billion) -112.4 - 116.0 -119.7 -113.4 -481.2 -463.0 -392.1
  Deficit % of GDP 2.4 2.5 2.6 2.5 2.6 2.6 2.3
 Balance on Goods ($ Billion) -196.1 -178.7 -187.7 -188.4 -749.9 -762.6 -752.2
  Exports -0.9% 4.4% 1.7% 1.8% -3.4% -7.5% 2.6%
  Imports 2.5% 1.2% 1.2% 2.6% -2.8% -4.7% 4.0%
 Balance on Services ($ Billion) 63.8 62.4 62.0 64.2 249.4 262.2 262.0
  Exports 1.0% 2.0% 0.8% 2.5% 0.2% 1.0% 6.0%
  Imports 0.4% 2.6% 0.5% 4.1% 2.9% 1.5% 4.4%
 Balance on Primary Income ($ Billion) 61.5 41.6 43.8 47.1 180.6 182.4 224.0
 Balance on Secondary Income ($ Billion) -41.5 -41.4 -37.7 -36.3 -161.2 -145.0 -125.9
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