Current Account Narrows

The US current account narrowed in the second quarter to a deficit of $128.2 billion, which is higher than Econoday's $125.8 billion consensus but down from an upward revised $136.2 billion in the first quarter. And however much attention is focused on the nation's rising government debt, this deficit, which tracks trade and income flows, is modest relative to GDP at 2.4 percent and down from 2.6 percent in the first quarter.

Income flows helped the second quarter as the surplus on primary income, boosted by 2017 tax cuts on foreign dividends, rose nearly $8 billion to $67.6 billion while the deficit in secondary income, kept lower by decreases in US government grants, fell more than $4 billion to $32.5 billion. These offset a rise in the US goods and services trade gap which totaled $163.3 billion in the quarter.