Global| Dec 19 2019U.S. Current Account Deficit Narrows Slightly in Q3
Summary
The U.S. current account deficit narrowed less than expected to $124.1 billion during Q3'19 from a downwardly-revised $125.2 bil. in Q2'19 (was $128.2 bil.). The Action Economics Forecast Survey anticipated a $122.1 bil. deficit. As a [...]
The U.S. current account deficit narrowed less than expected to $124.1 billion during Q3'19 from a downwardly-revised $125.2 bil. in Q2'19 (was $128.2 bil.). The Action Economics Forecast Survey anticipated a $122.1 bil. deficit. As a percent of GDP, the deficit declined to 2.3% from an unrevised 2.4% in Q2, and a six-and-a-half year high 2.8% in Q4'2018.
The smaller deficit last quarter was the result of a $3.7 bil. decrease in the goods deficit, which was somewhat offset by a $1.9 bil. decline in the service surplus and a $0.6 bil. deterioration in the income surplus. Both goods exports and imports were down 0.2% and 0.7% respectively (-1.4% and -2.2% y/y). Four out of the seven major categories of goods trade improved, led by $3.5 and $2.4 bil. narrowing in the industrial supplies and vehicles balances. Meanwhile, the consumer goods deficit increased by $2.3 bil.
Services exports edged down 0.1% in Q3 (+2.6% y/y) while imports rose 1.1% (5.3% y/y). Five of the nine major services categories showed a worsening trade balance led by a $0.7 declines in both travel and intellectual property services surpluses.
The surplus on primary income increased to a record high $68.7 bil., though as a share of GDP it has hovered around 0.3% since 2012. Despite higher interest rates in the U.S. versus much of the rest of the world, the investment income balance rose to a record $72.1 bil. -- it has also been range-bound around 0.3% of GDP since 2012. The deficit on secondary income increased to $35.5 bil. near Q1's record $36.6 bil.
Balance of Payments data are in Haver's USINT database, with summaries available in USECON. The expectations figure is in the AS1REPNA database.
| US Balance of Payments SA | Q3'19 | Q2'19 | Q1'19 | 2018 | 2017 | 2016 |
|---|---|---|---|---|---|---|
| Current Account Balance ($ Billion) | -124.1 | -125.2 | -136.2 | -491.0 | -439.6 | -428.3 |
| Deficit % of GDP | -2.3 | -2.4 | -2.6 | 2.4 | 2.3 | 2.3 |
| Balance on Goods ($ Billion) | -219.6 | -223.2 | -216.7 | -887.3 | -805.2 | -749.8 |
| Exports (% Chg) | -0.2 | -1.1 | 0.5 | 7.8 | 6.6 | -3.6 |
| Imports (% Chg) | -0.7 | 0.3 | -2.1 | 8.6 | 6.9 | -2.9 |
| Balance on Services ($ Billion) | 62.2 | 64.1 | 60.3 | 259.7 | 255.1 | 246.8 |
| Exports (% Chg) | -0.1 | 2.1 | 0.5 | 3.5 | 5.3 | 0.4 |
| Imports (% Chg) | 1.1 | 0.4 | 1.4 | 4.3 | 6.3 | 4.0 |
| Balance on Primary Income ($ Billion) | 68.7 | 66.6 | 56.9 | 254.0 | 225.8 | 198.7 |
| Balance on Secondary Income ($ Billion) | -35.5 | -32.7 | -36.6 | -117.3 | -115.3 | -124.0 |
Gerald D. Cohen
AuthorMore in Author Profile »Gerald Cohen provides strategic vision and leadership of the translational economic research and policy initiatives at the Kenan Institute of Private Enterprise.
He has worked in both the public and private sectors focusing on the intersection between financial markets and economic fundamentals. He was a Senior Economist at Haver Analytics from January 2019 to February 2021. During the Obama Administration Gerald was Deputy Assistant Secretary for Macroeconomic Analysis at the U.S. Department of Treasury where he helped formulate and evaluate the impact of policy proposals on the U.S. economy. Prior to Treasury, he co-managed a global macro fund at Ziff Brothers Investments.
Gerald holds a bachelor’s of science from the Massachusetts Institute of Technology and a Ph.D. in Economics from Harvard University and is a contributing author to 30-Second Money as well as a co-author of Political Cycles and the Macroeconomy.
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