US current account deficit narrows in Q2

THE US current account deficit narrowed sharply in the second quarter as surpluses on services and primary income offset a shortfall on goods, data showed on Thursday (Sep 21).

The Commerce Department said the current account deficit, which measures the flow of goods, services and investments into and out of the country, contracted by US$2.4 billion, or 1.1 per cent, to US$212.1 billion last quarter. That was the lowest level since the second quarter of 2021.

The current account gap represented 3.166 per cent of gross domestic product, compared with 3.234 per cent in the first quarter. The deficit peaked at 6.3 per cent of GDP in the fourth quarter of 2005.

The United States is now a net exporter of crude oil and fuel. Though the deficit remains large, it has no impact on the dollar given its status as the reserve currency.

Exports of goods dropped US$29.0 billion to US$497.6 billion, while goods imports fell US$17.1 billion to US$772.8 billion. The decline in both exports and imports mostly reflected a decrease in industrial supplies and materials, largely petroleum and products.

Exports of services increased US$4.7 billion to US$247.3 billion, lifted by personal travel as well as professional and management consulting services. Imports of services fell US$5.5 billion to US$175.7 billion, weighed down by sea freight transport and personal travel.

SEE ALSO

US Fed leaves rates unchanged, sees tighter policy through next year

Asean Intelligence

Get insights into businesses across South-east Asia

Get the free report

Primary income receipts increased US$15.5 billion to US$354.5 billion, while payments of primary income jumped US$12.0 billion to US$319.5 billion. Both were boosted by higher interest on loans and deposits amid tighter US and foreign monetary policy. REUTERS