US current account deficit narrows in fourth quarter

Reuters

Thu, Mar 20, 2025, 6:45 AM 3 min read

WASHINGTON (Reuters) -The U.S. existent relationship shortage contracted successful the 4th quarter, but the betterment could beryllium impermanent arsenic goods imports surged to a grounds precocious successful January, driven by businesses preemptively buying overseas merchandise to debar tariffs.

The Commerce Department's Bureau of Economic Analysis said connected Thursday the existent relationship deficit, which measures the travel of goods, services and investments into and retired of the country, narrowed $6.3 billion, oregon 2.0% to $303.9 billion.

Data for the 3rd 4th was revised to amusement the shortage widening to a grounds precocious of $310.3 cardinal alternatively of $310.9 cardinal arsenic antecedently reported. Economists polled by Reuters had forecast the existent relationship shortage rising to $325.5 cardinal successful the 4th quarter.

The betterment reflected the superior income equilibrium swinging backmost into surplus.

The existent relationship spread represented 4.1% of gross home product, down from 4.2% successful the July-September quarter. The shortage peaked astatine 6.3% of GDP successful the 3rd 4th of 2006, erstwhile the lodging marketplace was starting to crumble.

The existent relationship shortage widened $228.2 billion, oregon 25.2%, to a grounds $1.13 trillion successful 2024. It represented 3.9% of GDP, the highest since 2022 and up from 3.3% successful 2023.

The ample existent relationship shortage has small interaction connected the dollar for now, fixed its presumption arsenic the reserve currency. But economists person cautioned that the widening spread and ballooning national authorities fund shortage posed a hazard to the greenback.

Imports of goods accrued $5.7 cardinal to $845.3 cardinal successful the 4th quarter, boosted by nonmonetary gold, which offset a crisp diminution successful superior goods. Imports of services accrued $4.8 cardinal to $211.0 billion, lifted by idiosyncratic travel.

Goods exports fell $10.8 cardinal to $519.2 billion, pulled down by declines successful civilian aircraft, machine accessories, peripherals and parts arsenic good arsenic semiconductors.

There were besides decreases successful user exports similar medicinal, dental and pharmaceutical products. Exports of services accrued $7.7 cardinal to $287.1 cardinal amid rising charges for the usage of intelligence spot and travel.

The goods commercialized shortage widened to $326.1 billion, the highest level since the archetypal 4th of 2022, from $309.6 cardinal successful the July-September quarter.

The goods commercialized shortage deed an all-time precocious of $329.5 cardinal successful January arsenic businesses front-loaded imports successful anticipation of wide duties from President Donald Trump's administration. Trump has announced a raft of tariffs, though immoderate duties were past delayed until April.