default header
16 December 2003
Current Account Deficit Drops in Third Quarter, Commerce Reports
Trade deficit went down in July-September, department says
Washington -- The deficit in the U.S. current account, the broadest measure of U.S. transactions with the rest of the world, decreased in the third quarter reflecting a drop in the trade deficit, the U.S. Department of Commerce reports.
In a December 16 report, the department estimated the July-September current account deficit at a seasonally adjusted $135 billion, down from a revised $139.4 billion in the second quarter to the lowest level since the fourth quarter of 2002.
The trade deficit in goods decreased as exports went up more than imports did, the department said. Much of the increase in exports was accounted for by capital goods; most of the increase in imports was accounted for by higher oil prices.
The surplus in services trade increased in the third quarter, partly because of higher travel and passenger fare receipts, the department said. Investment income on U.S.-owned assets abroad went up faster than income payments to foreigners on assets in the United States. The level of unilateral transfers including foreign aid changed little.
The capital and financial accounts reflect activity in the current account. An increase of U.S.-owned assets abroad decelerated to $4.9 billion in the third quarter from $112.8 billion in the second, reflecting in part a sizable drop in U.S. bank loans to foreigners. Net U.S. purchases of foreign stocks went up as net sales of foreign bonds went down.
An increase in foreign-owned assets in the United States also decelerated to $128.2 billion in the third quarter, down from $262.8 billion in the second, the department said. Foreigners shifted to net sales of U.S. stocks of $3.5 billion in the third quarter after making net purchases of $20.6 billion in the second. Net foreign purchases of U.S. Treasury securities were down in the third quarter while net foreign sales of federally sponsored agency bonds increased sharply.
According to Commerce, the foreign exchange value of the U.S. dollar was unchanged in the third quarter on a trade-weighted basis against a group of seven major currencies.
Following are some key figures:
U.S. CURRENT ACCOUNT
Millions of dollars, seasonally adjusted
year 1st qtr 2nd qtr 3rd qtr
2002 2003 2003 2003
BALANCE ON:
Merchandise trade -482,872 -136,018 -138,088 -136,232
Services 64,834 14,389 13,904 14,915
Income -3,970 191 1,730 2,595
Unilateral transfers -58,853 -17,269 -16,940 -16,319
-------- ------- ------- -------
Current account -480,861 -138,707 -139,394 -135,041
U.S. CAPITAL AND FINANCIAL ACCOUNT
Millions of dollars, seasonally adjusted
year 1st qtr 2nd qtr 3rd qtr
2002 2003 2003 2003
NET CHANGE IN:
Capital account
transactions -1,285 -388 -1,553 -795
U.S. assets abroad
(an increase in
capital outflow
is -) -178,985 -101,331 -112,818 -4,891
Foreign assets in U.S.
(an increase in
capital inflow
is +) 706,983 242,004 262,819 128,200
(Distributed by the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)
