Research >> Economics
3Q2019 Current Account Deficit Decreased
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The U.S. current account deficit, which reflects the combined balances on trade in goods and services and income flows between U.S. residents and residents of other countries, narrowed by $1.1 billion, or 0.9 percent, to $124.1 billion in the third quarter of 2019, according to statistics from the U.S. Bureau of Economic Analysis (BEA). The revised second quarter deficit was $125.2 billion.
The third quarter deficit was 2.3 percent of current dollar gross domestic product, down less than 0.1 percent from the second quarter.
The $1.1 billion narrowing of the current account deficit in the third quarter mainly reflected a reduced deficit on goods and an expanded surplus on primary income.
Exports of goods and services to, and income received from, foreign residents decreased $4.3 billion, to $944.4 billion, in the third quarter. Imports of goods and services from, and income paid to, foreign residents decreased $5.4 billion, to $1.07 trillion.
Trade in Goods
Exports of goods decreased $0.9 billion, to $413.8 billion, and imports of goods decreased $4.5 billion, to $633.4 billion. The decreases in both exports and imports mainly reflected decreases in industrial supplies and materials, primarily petroleum and products.
Trade in Services
Exports of services decreased $0.3 billion, to $212.0 billion, reflecting partly offsetting changes across major categories. Decreases were led by travel, mainly other personal travel, and increases were led by other business services, mainly professional and management consulting services. Imports of services increased $1.6 billion, to $149.8 billion, reflecting increases in nearly all major categories. Increases were led by insurance services, mainly reinsurance.
Primary Income
Receipts of primary income decreased $4.1 billion, to $282.0 billion, and payments of primary income decreased $6.2 billion, to $213.3 billion. The decreases in both receipts and payments mainly reflected decreases in direct investment income and in other investment income. Within direct investment income receipts, dividends increased $24.9 billion, to $95.3 billion, in the third quarter and remain elevated since the passage of the 2017 Tax Cuts and Jobs Act, which generally eliminated taxes on repatriated earnings beginning in 2018. For more information, see “How do the effects of the 2017 Tax Cuts and Jobs Act appear in BEA’s direct investment statistics?” The decreases in other investment income receipts and payments mainly reflected decreases in interest on loans and deposits.
Secondary Income
Receipts of secondary income increased $1.0 billion, to $36.6 billion, mainly reflecting an increase in private sector fines and penalties, a component of private transfer receipts. Payments of secondary income increased $3.7 billion, to $72.0 billion, mainly reflecting increases in U.S. government grants and in insurance-related transfers, a component of private transfer payments.
Posted: December 19, 2019 Thursday 08:30 AM