US current account deficit narrows in Q3 on petroleum exports

THE US current account deficit was the smallest in more than two years in the third quarter amid rising petroleum exports, government data showed on Wednesday (Dec 20).

The Commerce Department’s Bureau of Economic Analysis said that the current account deficit, which measures the flow of goods, services and investments into and out of the country, contracted US$16.5 billion, or 7.6 per cent, to US$200.3 billion last quarter. That was the smallest since the second quarter of 2021.

Economists polled by Reuters had forecast the current account deficit at US$196 billion.

The current account gap represented 2.9 per cent of gross domestic product, the smallest share since the first quarter of 2021, and down from 3.2 per cent in the second 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 increased US$19.1 billion to US$516.4 billion, driven by petroleum and related products. Exports of services rose US$2.7 billion to US$252.2 billion as an increase in personal travel partially offset a decline in technical, trade-related, and other business services.

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Imports of goods increased US$4.6 billion to US$777.4 billion, boosted by passenger cars, other parts and accessories. That partly offset a drop in imports of non-monetary gold. Imports of services fell US$1.9 billion to US$176.0 billion, reflecting a decline in sea freight transport.

Primary income receipts increased US$11.8 billion to US$362.1 billion, while payments of primary income rose US$14.0 billion to US$332.1 billion. REUTERS