US Current account deficit narrowed in Q4 helped by primary income surplus - Wells Fargo

Analysts from Wells Fargo, point out that the US current account deficit narrowed further during the fourth quarter of last year, helped by a primary income surplus.

Key Quotes: 

“The current account deficit, the broadest measure of the country’s external sector, which includes trade in goods as well as services, improved by $3.6 billion during the last quarter of 2016. As we pointed out during the release of the third quarter current account numbers, the improvement in the current account during the third quarter was a one-off event due to the strong increase in soybeans exports from the United States to the rest of the world as U.S. farmers took advantage of the smaller soybean crops exported from large South American producers.”

“Overall, exports of goods and services plus income receipts increased $4.0 billion during the quarter as primary income receipts increased $4.4 billion. The main driver of this improvement in primary income receipts was an increase in investment income. Meanwhile, exports decreased $3.4 billion during the quarter.”

“From the imports side, goods increased by $14.1 billion. This rise was mostly due to an increase in industrial supplies and consumer goods with the exception of food and automobiles.”

“The preliminary current account deficit for 2016 was $481.2 billion compared to a deficit of $463.0 billion during 2015. As a percentage of current-dollar GDP, the deficit was 2.6 percent, the same percentage of GDP that was recorded in 2015.”