| Consensus | Consensus Range | Actual | Previous | Revised | |
| Balance | $-252.5B | $-315.0B to $-205.0B | $-246.0B | $-226.8B | $-212.6B |
Highlights
The current acccount deficit widens about as expected to $246.0 billion in Q2 from a revised $212.6 billion in Q1 (was $226.8 billion). Mostly the wider gap reflects a larger deficit in goods. The Econoday consensus forecast looked for a Q2 deficit of $252.5 billion.
The $33.4 billion widening of the current-account deficit in the second quarter reflects a wider deficit on goods that partly offset by lower deficits on primary (earned) income and on secondary income (current transfers).
Exports of goods and services to, and income received from, foreign residents rises $58.8 billion to $1.44 trillion in the second quarter, reflecting increases in goods exports and in primary (earned) income receipts.
Imports of goods and services from, and income paid to, foreign residents rises $92.2 billion to $1.69 trillion, reflecting increases in goods imports and in primary (earned) income payments.
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.