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US current account deficit hits record high in the third quarter
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US current account deficit hits record high in the third quarter
Dec 18, 2024 6:46 AM

WASHINGTON (Reuters) - The U.S. current account deficit widened to a record high in the third quarter amid a surge in imports and lower primary income receipts.

The Commerce Department's Bureau of Economic Analysis said on Wednesday that the current account deficit, which measures the flow of goods, services and investments into and out of the country, increased $35.9 billion, or 13.1%, to an all-time high of $310.9 billion last quarter.

Economists polled by Reuters had forecast the current account deficit at $284.0 billion.

The current account gap represented 4.2% of gross domestic product, the highest since the first quarter of 2022, up from 3.7% in the April-June quarter. The deficit peaked at 6.3% of GDP in the fourth quarter of 2005.

The large current account deficit has little impact on the dollar given its status as the reserve currency.

Imports of goods jumped $23.7 billion to $837.2 billion, the highest since the second quarter of 2022. They were boosted by capital goods, mostly computer accessories, peripherals, and parts, as well as electric-generating machinery, electric apparatus, and parts, and computers.

Consumer goods imports also rose, driven by medicinal, dental and pharmaceutical products. That far outpaced a $13.6 billion rise in exports to $530.0 billion, reflecting capital goods such as semiconductors, computer accessories, peripherals and parts; and civilian aircraft.

The goods trade deficit widened to $307.3 billion, the most since the second quarter of 2022, from $297.2 billion in the April-June quarter.

Receipts of primary income fell $15.5 billion to $345.7 billion, pulled down by a decrease in direct investment income, mainly earnings.

Payments of primary income declined $3.8 billion to $361.2 billion, reflecting decreases in direct investment income, mainly earnings. Portfolio investment income also fell, mostly reflecting interest on long-term debt securities.

Receipts of secondary income edged up $0.2 billion to $50.2 billion, lifted by private transfers, mostly insurance-related transfers. Payments of secondary income increased $16.1 billion to $112.0 billion, reflecting an increase in general government transfers, mainly international cooperation.

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