U.S. current account
shrinks in fourth quarter
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[March 21, 2017]
WASHINGTON
(Reuters) - The U.S. current account deficit unexpectedly fell in the
fourth quarter, hitting its lowest level in more than a year, as an
increase in the primary income surplus offset a soybean-driven drop in
exports.
The Commerce Department said on Tuesday the current account deficit,
which measures the flow of goods, services and investments into and out
of the country, fell 3.1 percent to $112.4 billion, the lowest since the
second quarter of 2015.
The current account deficit for the third quarter was revised up to
$116.0 billion from the previously reported $113.0 billion. Economists
polled by Reuters had forecast the deficit rising to $128.2 billion in
the fourth quarter.
The fourth-quarter current account deficit represented 2.4 percent of
gross domestic product, down from 2.5 percent in the third quarter. For
all of 2016 the current account deficit totaled $481.2 billion, a 3.9
percent increase from 2015.
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That represented 2.6 percent of GDP, unchanged from 2015.
The current account deficit has dropped from a record high of 6.3
percent of GDP in the fourth quarter of 2005 as rising domestic oil
production and lower global oil prices curbed the import bill.
Goods exports fell $3.4 billion to $371.7 billion in the fourth quarter.
That reflected an $8.4 billion decrease in the export of food, mainly
soybeans. Exports were also crimped by the dollar, which gained more
than 5 percent against the currencies of the United States' main trading
partners in the fourth quarter.
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U.S. dollar notes are seen in this November 7, 2016 picture
illustration. Picture taken November 7. REUTERS/Dado Ruvic/Illustration
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The surplus on primary income - which includes investment income such as
dividends, and employee compensation - increased $19.9 billion. Primary
income receipts increased $4.4 billion to $207.9 billion, reflecting
increases in direct investment income, mostly equity and portfolio
inflows.
The deficit on secondary income, U.S. government grants, pensions, fines
and penalties, and worker remittances rose to $41.5 billion from $41.4
billion in the third quarter.
(Reporting by Lucia Mutikani; Editing by Andrea Ricci)
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