The current account deficit is $310.9 billion in the third quarter 2024 compared to a deficit of $275.0 billion in the second quarter. The third quarter deficit is below the consensus of $287.0 in the Econoday survey of forecasters. Exports of goods, services, and receipts are up 0.5 percent in the third quarter to $1,205.7 billion, while imports are up 2.8 percent to $1,516.7 billion.

Exports of goods are up 2.6 percent to $530.0 billion, exports of services are up 2.8 percent to $279.9 billion, and income receipts are down 3.7 percent to $395.9 billion. Goods exports have solid increases of 6.6 percent in capital goods except automotive and 5.4 percent in foods, feeds, and beverages. Exports of nonmonetary gold are up 39.3 percent, although this is a small share of overall goods exports. Services exports are up 1.5 percent in"other" business services and 1.3 percent for travel. Exports of income receipts were lower in most categories of investment income.

Imports of goods are up 2.9 percent to $837.2 billion, imports of services are up 3.0 percent to $206.2 billion, and payments abroad are up 2.7 percent to $473.2 billion. Goods imports are higher mainly with rises of 6.9 percent capital goods except automotive and 4.7 percent in consumer goods except automotive. Services imports for transport are up 2.0 percent and"other" business services up 1.2 percent. Import payments are lower for most types of investment income.

The consensus looks for a deficit of $287.0 billion.

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)

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.