US current account deficit expands by 13.1% in Q3
The US current-account deficit increased by $35.9 billion, or 13.1 per cent, in the third quarter of 2024, reaching $310.9 billion, said the US Bureau of Economic Analysis (BEA) on Wednesday. This rise, up from a revised second-quarter deficit of $275.0 billion, reflects a larger gap in trade, income, and transfers between the US and other countries. The deficit now represents 4.2 per cent of the nation’s gross domestic product, compared to 3.7 per cent in the previous quarter.
The expansion was driven by growing deficits in goods trade, primary income, and secondary income transactions.
Key Transactions in Goods, Services, and Income
- Trade in Goods: Exports rose by $13.6 billion to $530.0 billion, driven by higher shipments of semiconductors, computer accessories, and civilian aircraft. Imports climbed by $23.7 billion to $837.2 billion, with notable increases in capital goods and pharmaceutical products.
- Trade in Services: Exports grew by $7.7 billion to $279.9 billion, bolstered by gains in telecommunications and military-related services. Imports rose by $6.0 billion to $206.2 billion, primarily due to higher charges for intellectual property and reinsurance services.
- Primary Income: Receipts fell by $15.5 billion to $345.7 billion, primarily due to lower direct investment income. Payments also declined, decreasing by $3.8 billion to $361.2 billion.
- Secondary Income: Receipts edged up by $0.2 billion to $50.2 billion, while payments jumped by $16.1 billion to $112.0 billion, largely due to increased government transfers.
Capital and Financial Account Highlights
- Capital Transfers: The quarter included $1.6 billion in receipts, largely from foreign insurance payouts for Hurricane Helene, while payments rose by $1.8 billion to $3.3 billion.
- Financial Transactions: Net financial-account transactions reflected $493.6 billion in U.S. borrowing from foreign residents. Foreign financial assets held by U.S. residents increased by $201.9 billion, while liabilities to foreign residents rose sharply by $716.7 billion, mainly due to gains in portfolio investments.
Attribution: BEA
Subediting: Y.Yasser
