US current account deficit widened by 10.7% to US$266.8B in Q2, mostly reflected an expanded deficit on goods; Q2 deficit was 3.7% of current GDP, up from 3.4% in Q1: BEA

Current-Account Deficit Widened by 10.7 Percent

Current-Account Balance (chart 1)

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, widened by $25.8 billion, or 10.7 percent, to $266.8 billion in the second quarter of 2024, according to statistics released today by the U.S. Bureau of Economic Analysis. The revised first-quarter deficit was $241.0 billion.

The second-quarter deficit was 3.7 percent of current-dollar gross domestic product, up from 3.4 percent in the first quarter.

The $25.8 billion widening of the current-account deficit in the second quarter mostly reflected an expanded deficit on goods.

Current-Account Transactions (tables 1–5 and chart 2)

Exports of goods and services to, and income received from, foreign residents increased $4.9 billion to $1.20 trillion in the second quarter. Imports of goods and services from, and income paid to, foreign residents increased $30.7 billion to $1.47 trillion.¹

Trade in goods (table 2)

Exports of goods decreased $0.1 billion to $516.7 billion, reflecting offsetting changes in several categories. The largest decrease was in nonmonetary gold. The largest increase was in capital goods, mainly computers. Imports of goods increased $20.1 billion to $813.9 billion, reflecting increases in capital goods, mostly computer accessories, peripherals, and parts; computers; and semiconductors, and in consumer goods, mainly medicinal, dental, and pharmaceutical products.

Trade in services (table 3)

Exports of services increased $3.1 billion to $271.7 billion, reflecting an increase in “other business services,” mainly professional and management consulting services and research and development services, that was partly offset by a decrease in telecommunications, computer, and information services, mostly computer services. Imports of services increased $2.9 billion to $197.7 billion, reflecting increases in charges for the use of intellectual property, mainly licenses for the use of outcomes of research and development; in insurance services, mostly reinsurance; and in transport, mostly air passenger transport.

Primary income (table 4)

Receipts of primary income increased $2.7 billion to $362.4 billion, and payments of primary income increased $8.3 billion to $361.3 billion. The increases in both receipts and payments primarily reflected increases in portfolio investment income, mostly equity securities.

Secondary income (table 5)

Receipts of secondary income decreased $0.9 billion to $49.3 billion, reflecting a decrease in general government transfers, mostly fines and penalties. Payments of secondary income decreased $0.6 billion to $93.9 billion, reflecting a decrease in general government transfers, mainly international cooperation.

Capital-Account Transactions (table 1)

Capital-transfer receipts decreased $38 million to $6 million in the second quarter. Capital-transfer payments decreased $0.4 billion to $1.5 billion, mostly reflecting a decrease in infrastructure grants.

Financial-Account Transactions (tables 1, 6, 7, and 8 and chart 3)

Net financial-account transactions were −$304.3 billion in the second quarter, reflecting net U.S. borrowing from foreign residents.

Financial assets (tables 1, 6, 7, and 8)

Second-quarter transactions increased U.S. residents’ foreign financial assets by $153.1 billion. Transactions increased portfolio investment assets, mainly long-term debt securities, by $109.4 billion; direct investment assets, mainly equity, by $47.5 billion; and reserve assets by $0.7 billion. Transactions decreased “other investment assets” by $4.5 billion, resulting from a decrease in loans that was mostly offset by an increase in deposits.

Liabilities (tables 1, 6, 7, and 8)

Second-quarter transactions increased U.S. liabilities to foreign residents by $387.0 billion. Transactions increased portfolio investment liabilities, both long-term debt securities and equity, by $258.7 billion; direct investment liabilities, mostly equity, by $89.5 billion; and “other investment liabilities,” mostly deposits, by $38.8 billion.

Financial derivatives (table 1)

Net transactions in financial derivatives were –$70.5 billion in the second quarter, reflecting net U.S. borrowing from foreign residents.

Next release: December 18, 2024, at 8:30 a.m. EST
U.S. International Transactions, 3rd Quarter 2024