The current account deficit is a measure of total transactions between America and the rest of world in goods and services, as well as investment (primary income) and current monetary transfers (secondary income).
America’s exports in goods and services accounted for $592 bln in Q3, an increase of 0.9 percent compared to Q2. Imports in the US decreased quarter-on-quarter by 0.2 percent, down to $716.3 bln. In all, the trade deficit fell to $182.1 bln from the previous quarter’s figure of $189.3 bln.
The US deficit had been on the decline during the past several quarters due to the increase in shale oil and gas production, effectively contributing to the decrease in imports. This quarter’s rise in outbound money transfers came unexpectedly, as most observers were predicting further decrease in current deficit to $97.5 bln.
The primary source for the secondary income for the United States has been fines and penalties paid to the US by foreign entities. However, in Q3 there have been far less major commercial scandals involving the US and foreign businesses, thus US secondary income fell to $27.8 bln from the second quarter’s figure of 40.1 bln.
Despite thus quarter’s mishap, America’s current deficit in anticipated to decrease further in mid-to-long term as total exports and overall economy are on the ascending trend.
