Preview: Due June 20 - U.S. Q1 Current Account - Deficit to correct higher
We expect a Q1 US current account deficit of $207.0bn, or 2.9% of GDP, up from $194.8bn in Q4 when the deficit was 2.8% of GDP. Trend in the deficit has been narrowing since Q1 2022 and it is unclear whether Q1’s deterioration marks a turning of trend.
The deterioration in the deficit will be largely due to an increase in the goods trade deficit for which data has been already released. This was largely due to a rebound in imports from a weak Q4. The services surplus saw a modest improvement.
Still to be released are data on primary (investment) income and secondary (unilateral transfers) income. We expect Q1’s totals to look similar to the respective Q4 totals of a $36.1bn surplus and a $39.0bn deficit. However Fed flow of funds data suggest Q4’s primary income surplus may be revised lower, leaving the Q1 outcome improved from a weaker Q4 outcome.
