US current account deficit widens sharply in second quarter

The US current account deficit widened sharply in the second quarter amid a surge in imports of goods, government data showed on Thursday.

The Commerce Department's Bureau of Economic Analysis said the current account deficit, which measures the flow of goods, services and investments into and out of the country, increased US$33.4 billion (HK$260.52 billion), or 15.7 percent, to US$246.0 billion last quarter.

Data for the January–March quarter was revised lower to show the shortfall at US$212.6 billion instead of the previously estimated US$226.8 billion. Economists polled by Reuters had forecast the current account gap would widen to US$255.0 billion.

The second-quarter current account deficit represented 3.0 percent of gross domestic product, up from 2.7 percent in the January–March quarter. It peaked at 6.3 percent in the third quarter of 2006. While the current account deficit has no impact on the dollar, given the greenback's status as a reserve currency, concerns are growing over the nation's ballooning twin deficits.

Goods imports shot up by US$67.4 billion to US$931.6 billion. That outpaced a US$27.1 billion increase in exports of goods to US$640.3 billion. As a result, the goods trade deficit widened US$40.4 billion to US$291.3 billion. Trade subtracted 1.14 percentage points from gross domestic product in the second quarter and has been a drag for three straight quarters.

The primary income balance narrowed to US$11.4 billion last quarter from US$15.8 billion in the January–March quarter. Primary income receipts rose to US$416.2 billion from US$391.5 billion in the prior quarter. Primary income payments increased to US$427.6 billion from US$407.3 billion in the first quarter.

The nation's international investment position, the difference between US residents' foreign financial assets and liabilities, deteriorated slightly to a US$22.42 trillion deficit at the end of the second quarter from a US$21.27 trillion shortfall in the first quarter. Assets totaled US$46.97 trillion, while liabilities amounted to US$69.39 trillion.

Reuters

𝗗𝗼𝘄𝗻𝗹𝗼𝗮𝗱 𝗧𝗵𝗲 𝗦𝘁𝗮𝗻𝗱𝗮𝗿𝗱 𝗔𝗽𝗽 ↓