| Consensus | Consensus Range | Actual | Previous | Revised | |
|---|---|---|---|---|---|
| Balance | $-218.2B | $-221.0B to $-192.5B | $-219.3B | $-206.8B | $-216.2B |
Highlights
The US current account balance is a deficit of $219.3 billion in the first quarter 2023 after a downward revision to a deficit of $216.2 billion in the fourth quarter. This is below the consensus of a deficit of $218.2 billion in the Econoday survey of forecasts. The BEA attributed the $3.1 billion or 1.5 percent widening in the current account deficit to,"an expanded deficit on secondary income and a reduced surplus on primary income that were partly offset by a reduced deficit on goods." The report includes annual revisions.
Exports of goods, services, and income receipts are up $16.0 billion to $1.15 trillion in the first quarter. Exports of goods are $526.6 billion, or up 1.7 percent. Services exports are $244.3 billion, or up 1.5 percent. Exports of income receipts are $383.1 billion, or up 0.9 percent.
First quarter imports of goods, services, and payments are up $19.1 billion $1.37 trillion from the prior quarter. Imports of goods are down 0.3 percent to $789.7 billion, while services imports are up 1.1 percent to $182.2 billion. Income payments are up 5.1 percent to $401.4 billion.
Exports of goods, services, and income receipts are up $16.0 billion to $1.15 trillion in the first quarter. Exports of goods are $526.6 billion, or up 1.7 percent. Services exports are $244.3 billion, or up 1.5 percent. Exports of income receipts are $383.1 billion, or up 0.9 percent.
First quarter imports of goods, services, and payments are up $19.1 billion $1.37 trillion from the prior quarter. Imports of goods are down 0.3 percent to $789.7 billion, while services imports are up 1.1 percent to $182.2 billion. Income payments are up 5.1 percent to $401.4 billion.
Market Consensus Before Announcement
The first-quarter current account deficit is expected to widen to $218.2 billion versus $206.8 billion in the fourth quarter.
Definition
The current account, on a quarterly basis, measures the U.S. international balance in goods and services trade as well as unilateral transfers. (Bureau of Economic Analysis)
Description
U.S. trade with foreign countries holds important clues to economic trends here and abroad. The data can directly impact all the financial markets, but especially the foreign exchange value of the dollar. The dollar can be particularly sensitive to changes in the chronic trade deficit run by the United States since this trade imbalance creates greater demand for foreign currencies.
The bond market is very sensitive to the risk of importing inflation or deflation. When Asian economies collapsed at the end of 1997, bond and equity investors feared that deflation in these economies would be transported to the United States. While goods inflation did decline modestly and momentarily, service inflation kept on ticking. Thus, the linkage is not so direct.
A chronic current account deficit also suggests that consumers and businesses in the United States are outspending their income. We are living on credit while foreigners are paying for our profligate ways.
The bond market is very sensitive to the risk of importing inflation or deflation. When Asian economies collapsed at the end of 1997, bond and equity investors feared that deflation in these economies would be transported to the United States. While goods inflation did decline modestly and momentarily, service inflation kept on ticking. Thus, the linkage is not so direct.
A chronic current account deficit also suggests that consumers and businesses in the United States are outspending their income. We are living on credit while foreigners are paying for our profligate ways.
