U.S. Current Account Deficit Narrowed in Q2'22
Summary
- Deficit narrowed by more than expected in Q2.
- The goods trade deficit narrowed. Goods exports posted a double-digit gain.
- The surplus on services trade narrowed slightly. Both travel exports and imports soared.
The U.S. current account deficit narrowed to $251.1 billion during Q2'22 from $282.5 billion in Q1'22, revised from $291.4 billion. The Action Economics Forecast Survey anticipated a $260.6 billion deficit. As a percent of GDP, the Q2 deficit contracted to 4.04% from 4.63% in Q1, revised from 4.78%. Exports overall rose 8.1% q/q (19.2% y/y) after a 2.4% gain, while imports rose 3.9% q/q (19.6% y/y) following a Q1 rise of 6.7%.
The deficit in goods trade narrowed to $310.5 billion after reaching a record of $341.7 billion, revised slightly from $342.2 billion. Exports jumped 10.7% (23.9% y/y) in Q2 from a 3.0% gain in Q1. Industrial supplies & materials exports rose 18.4% (43.5% y/y), while nonauto capital goods exports rose 1.6% (6.9% y/y). Automobile & parts exports rose 4.5% (11.9% y/y). Exports of foods, feeds & beverages jumped 13.5% (23.4% y/y) and consumer goods excluding food and autos rose 5.7% (19.6% y/y).
Imports of goods increased 2.5% (21.0% y/y) in Q2, following a 9.4% in Q1. As in Q1, the rise was led by a strong gain of 10.2% (39.4% y/y) in industrial supplies & materials imports, paced by rising oil prices. Nonauto consumer goods imports posted a small decline of 0.5% (+20.1% y/y) while auto imports rose 4.9% (14.2% y/y). Nonauto capital goods imports increased 0.7% (14.1% y/y) while food & beverage imports rose 5.0% (18.8% y/y).
The surplus on services trade narrowed slightly in Q2 to $57.1 billion from $58.9 billion in Q1, revised from $58.5 billion. Services exports rose 3.9% (15.7% y/y). Travel exports jumped 29.4% (110.9% y/y) as tourism strengthened. Services imports rose 6.5% (28.4% y/y) with a 33.8% jump (132.5% y/y) in travel imports. Charges for the use of intellectual property plummeted 24.5% (2.9% y/y).
The surplus on primary income widened to $43.6 billion in Q2 from $38.8 billion in Q1. Primary income receipts rose 7.6% (16.4% y/y). Primary income payments increased 6.8% (11.6% y/y).
On the capital flow side of the ledger, the net US acquisition of foreign financial assets dropped to $386.2 billion in Q2 from $414.6 billion in Q1. Direct investment assets declined to $99.1 billion from $134.0 billion in Q1.
Balance of Payments data are in Haver's USINT database, with summaries available in USECON. The expectations figure is in the AS1REPNA database.
Kathleen Stephansen, CBE
AuthorMore in Author Profile »Kathleen Stephansen is a Senior Economist for Haver Analytics and an Independent Trustee for the EQAT/VIP/1290 Trust Funds, encompassing the US mutual funds sponsored by the Equitable Life Insurance Company. She is a former Chief Economist of Huawei Technologies USA, Senior Economic Advisor to the Boston Consulting Group, Chief Economist of the American International Group (AIG) and AIG Asset Management’s Senior Strategist and Global Head of Sovereign Research. Prior to joining AIG in 2010, Kathleen held various positions as Chief Economist or Head of Global Research at Aladdin Capital Holdings, Credit Suisse and Donaldson, Lufkin and Jenrette Securities Corporation.
Kathleen serves on the boards of the Global Interdependence Center (GIC), as Vice-Chair of the GIC College of Central Bankers, is the Treasurer for Economists for Peace and Security (EPS) and is a former board member of the National Association of Business Economics (NABE). She is a member of Chatham House and the Economic Club of New York. She holds an undergraduate degree in economics from the Universite Catholique de Louvain and graduate degrees in economics from the University of New Hampshire (MA) and the London School of Economics (PhD abd).
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