The U.S. current-account deficit, which reflects the combined balances on trade in goods and services and income flows between U.S. residents and residents of other countries, narrowed by $31.5 billion, or 11.1%, to $251.1 billion in the second quarter of 2022, according to statistics released today by the U.S. Bureau of Economic Analysis. The revised first-quarter deficit was $282.5 billion.
The second-quarter deficit was 4.0% of current-dollar gross domestic product, down from 4.6% in the first quarter.
The $31.5 billion narrowing of the current-account deficit in the second quarter mostly reflected a decreased deficit on goods.
Exports of goods and services to, and income received from, foreign residents increased $82.8 billion to $1.11 trillion in the second quarter. Imports of goods and services from, and income paid to, foreign residents increased $51.3 billion to $1.36 trillion.
Exports of goods increased $52.0 billion to $539.9 billion, and imports of goods increased $20.8 billion to $850.4 billion. The increases in both exports and imports mostly reflected an increase in industrial supplies and materials, primarily petroleum and products.
Exports of services increased $8.4 billion to $225.2 billion, and imports of services increased $10.2 billion to $168.2 billion. The increases in both exports and imports mainly reflected increases in travel, mostly other personal travel, and in transport, mostly air passenger transport.
Receipts of primary income increased $21.1 billion to $299.1 billion, and payments of primary income increased $16.2 billion to $255.5 billion. The increases in both receipts and payments reflected increases in all major components. The increase in receipts was led by direct investment income, primarily earnings, and the increase in payments was led by other investment income, primarily interest.
Receipts of secondary income increased $1.4 billion to $43.6 billion, mostly reflecting an increase in general government transfers, primarily fines and penalties. Payments of secondary income increased $4.0 billion to $84.9 billion, reflecting increases in general government transfers, mostly international cooperation, and in private transfers, mostly insurance-related transfers.
Net financial-account transactions were — $159.5 billion in the second quarter, reflecting net U.S. borrowing from foreign residents.
Second-quarter transactions increased U.S. residents’ foreign financial assets by $386.2 billion. Transactions increased portfolio investment assets, mostly equity, by $279.8 billion; direct investment assets, mostly equity, by $99.1 billion; other investment assets by $6.1 billion, resulting from partly offsetting transactions in loans and deposits; and reserve assets by $1.2 billion.
Net transactions in financial derivatives were — $45.9 billion in the second quarter, reflecting net U.S. borrowing from foreign residents.
With this release of the U.S. International Transactions Accounts, beginning with the first quarter of 2022, exports of goods include military goods that were transferred from U.S.-owned stockpiles to Ukraine via the Presidential Drawdown Authority. Previously, these goods were recorded in exports of government goods and services not included elsewhere.