US current account deficit hits record high in Q3

The US current account deficit widened to a record high in the third quarter of 2024, amid a surge in imports, heightening concerns about the deficit and debt crisis facing US President-elect Donald Trump.

The Commerce Department’s Bureau of Economic Analysis said on Wednesday that the current account deficit, which measures the flow of goods, services and investments into and out of the country, increased by $35.9 billion, or 13.1%, to an all-time high of $310.9 billion in the July-September period.

Imports of goods jumped by $23.7 billion to $837.2 billion, the highest level since the second quarter of 2022, driven by imports of capital goods, in addition to power generation machinery, electrical appliances, spare parts and computers.

Imports of consumer goods also rose, driven by medical and dental products and pharmaceuticals.

This far outpaces the $13.6 billion increase in exports to $530 billion in July-September 2024.

The current account deficit represents about 4.2% of GDP in the third quarter of 2024, the highest since the first quarter of 2022, up from 3.7% in the second quarter of 2024.

The current account deficit peaked at 6.3% of GDP in the fourth quarter of 2005.