US: Current account deficit at 9-year high, will widen further - Wells Fargo
|The U.S. current account deficit widened in Q4, and it will probably continue to grow larger, explained analysts at Wells Fargo.
Key Quotes:
“The U.S. current account deficit widened to $128.2 billion in the fourth quarter, the largest deficit since Q4-2008.”
“The gaping $214.3 billion deficit in international trade in goods, which was already known before this morning’s data release, was partially offset by the $60.4 billion surplus in international trade in services. Americans also earned more income on their overseas investments than they had to pay to foreigners.”
“Foreigners continue to be willing financiers of the red ink in the U.S. current account. They made $54.1 billion worth of foreign direct investment (FDI) purchases in Q4. Net inflows of portfolio capital totaled $84.9 billion in the fourth quarter.”
“We forecast that the current account deficit will widen further in coming quarters, which should continue to exert modest downward pressure on the U.S. dollar.”
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