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Economy in Brief

U.S. Current Account Deficit Increases
by Tom Moeller  March 21, 2018

The U.S. current account deficit rose to $128.2 billion during Q4 2017 from $101.5 billion in Q3. It was the largest deficit since Q4 2008. The Q4 deficit figure compared to $124.7 billion expected in the Action Economics Forecast Survey. As a percent of GDP, the deficit grew to 2.6%. During all of last year, the current account deficit deepened to $466.2 billion, the largest since 2008.

The larger deficit last quarter was due to a deeper $214.3 billion shortfall on goods trade. A 3.7% increase (8.1% y/y) in goods exports was exceeded by a 5.7% rise (8.7% y/y) in imports. During all of last year, goods exports rose 6.5%, the largest rise since 2011. Imports rose 7.0% last year, also the largest increase since 2011.

The surplus on services trade increased slightly to $60.4 billion, but that remained smaller than the Q1'15 peak of $67.1 billion. Services exports rose 1.2% (5.0% y/y) while services imports gained 1.5% (7.8% y/y). For all of 2017, services exports increased 3.8%, the most since 2014. Exports of intellectual property rights rose 2.8% but travel exports declined 1.1%, the first annual decline since 2009. Services imports gained 6.6% for all of 2017. Charges for intellectual property increased 8.9% after an 11.4% rise and travel imports rose 9.4%, the largest increase since 2012.

The surplus on primary income eased to $57.2 billion, but remained near its six-year high. During all of  last year, the surplus rose to a record $217.0 billion. The deficit on secondary income increased to $31.5. During all of last year, the deficit eased to 114.8 billion.

From the capital account, the surplus on foreign direct investment shrank to $76.7 billion.

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 Q4'17 Q3'17 Q2'17 Q4'16 2017 2016 2015
Current Account Balance ($ Billion) -128.2 -101.5 -125.7 -114.0 -466.2 -451.7 -434.6
  Deficit % of GDP -2.6 -2.1 -2.6 -2.4 -2.4 -2.4 -2.3
 Balance on Goods ($ Billion) -214.3 -195.3 -201.3 -195.1 -811.2 -752.5 -761.9
  Exports 3.7% 1.3% -0.2% -0.1% 6.5% -3.6% -7.5%
  Imports 5.7% -0.2% 0.0% 2.0% 7.0% -2.8% -4.7%
 Balance on Services ($ Billion) 60.4 60.0 59.8 61.0 242.8 247.7 261.4
  Exports 1.2% 1.8% 0.2% 1.7% 3.8% -0.1% 1.5%
  Imports 1.5% 2.5% 2.4% 0.9% 6.6% 2.6% 2.3%
 Balance on Primary Income ($ Billion) 57.2 58.5 50.9 51.3 217.0 173.2 181.0
 Balance on Secondary Income ($ Billion) -31.5 -24.7 -33.2 -31.3 -114.8 -120.1 -115.1
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