US current account deficit shrinks in Q4 2024

The US current account deficit narrowed in the fourth quarter of 2024, as the rise in exports of goods and services outpaced that of imports.

Data from the Bureau of Economic Analysis today, March 20, revealed that the current account deficit - which measures the inflow and outflow of goods, services and investments – dropped $6.3 billion, or 2%, to stand at $303.9 billion by the end of Q4 2024, against forecasts for $330 billion.

The fourth-quarter current account deficit amounted to 4.1% of GDP, down from 4.2% in Q3 2024, data showed.

In Q4 2005, the account deficit peaked at 6.3% of GDP. While huge, this gap had minimal impact on the US dollar due to its reserve currency status.

The data also showed goods imports gained $5.7 billion to $845.3 billion in Q4 2024, while exports rose by $10.8 billion to $519.2 billion.

By the end of the three-month period, services exports were up by $7.7 billion to $287.1 billion, in tandem with a $4.8 billion hike in services imports to $211 billion for the same quarter.