Current Account Deficit Revised Upward

A steep deepening in the third-quarter trade gap drove the current account deficit to $124.8 billion vs a revised $101.2 billion in the second quarter. The current account as a percentage of GDP rose to 2.4 percent from the second quarter's 2.0 percent.

The trade deficit totaled $158.7 billion in the quarter for a $24.1 billion quarterly increase as a $227.0 billion deficit on goods, which was sharply deeper than the second quarter, dwarfed a $68.4 billion surplus that was little changed. Goods exports, pulled down especially by a drop in soybean exports, fell $7.7 billion in the quarter, while goods imports increased $16.3 billion with consumer goods, especially cell phones, a primary factor.

The surplus on primary income, reflecting a quarterly drop in direct investment income tied to repatriation effects of the 2018 corporate tax cut, fell $2.9 billion to $59.4 billion while the deficit on secondary income narrowed $3.4 billion to $25.6 billion. The quarter included a $0.6 billion benefit in foreign insurance receipts resulting from Hurricane Florence.