WASHINGTON (Reuters) - The U.S. current account deficit increased to a 14-year high in the second quarter as businesses boosted imports to replenish depleted inventories amid robust consumer spending.
The Commerce Department said the current account deficit, which measures the flow of goods, services and investments into and out of the country, rose 0.5% to $190.3 billion last quarter. That was the largest shortfall since the second quarter of 2007.
Data for the first quarter was revised to show a $189.4 billion gap, instead of $195.7 billion as previously reported.
The current account gap represented 3.3% of gross domestic product last quarter. That was down from 3.4% in the January-March quarter. Still, the deficit remains below a peak of 6.3% of GDP in the fourth quarter of 2005 as the United States is now a net exporter of crude oil and fuel.
The wider deficit is likely not an issue for the United States because of the dollar’s status as the world’s reserve currency. The current account gap could remain big as the nation leads the global economic recovery from the COVID-19 pandemic.
The economy grew at a 6.6% annualized rate in the second quarter, powered by another quarter of double-digit growth in consumer spending. Domestic demand, which has been buoyed by fiscal stimulus and vaccinations against the coronavirus, is being partially satiated with imports.
Inventories were depleted in the first half of the year.
Imports of goods increased $29.0 billion to $706.3 billion, primarily reflecting an increase in industrial supplies and materials, mostly petroleum products as well as metals and nonmetallic products.
Exports of goods rose $28.3 billion to $436.6 billion, lifted by industrial supplies and materials such as petroleum products. There were also gains in exports of capital goods, mainly civilian aircraft and semiconductors.
Imports of services increased $9.1 billion to $127.8 billion, mostly reflecting increases in sea freight and air passenger transport as well as other personal travel.
Exports of services increased $7.6 billion to $189.1 billion. They were driven by personal travel.
Primary income receipts advanced $7.7 billion to $270.6 billion. Payments of primary income rose $8.8 billion to $221.5 billion. The increases in both receipts and payments mainly reflected advances in direct investment income.
Secondary income receipts dropped $0.9 billion to $41.6 billion, pulled down by declines in general government transfers, mostly public sector fines and penalties. Payments of secondary income fell $3.5 billion to $72.6 billion as general government transfers decreased.