WASHINGTON- The US current account deficit surged to its highest level in more than 12 years in the third quarter as a record rebound in consumer spending pulled in imports, outpacing a recovery in exports.
The Commerce Department said on Friday the current account deficit, which measures the flow of goods, services and investments into and out of the country, widened 10.6 percent to $178.5 billion last quarter. That was the highest since the second quarter of 2008.
Data for the second quarter was revised to show a $161.4 billion shortfall, instead of $170.5 billion as previously reported. Economists polled by Reuters had forecast the current account gap increasing to $189.0 billion in the July-September quarter.
The current account gap represented 3.4 percent of gross domestic product in the third quarter. That was up from 3.3 percent in the April-June quarter and the largest since the fourth quarter of 2008. Still, the deficit remains below a peak of 6.3 percent of GDP in the fourth quarter of 2005 as the United States is now a net exporter of crude oil and fuel.
Imports of goods increased $94.4 billion to $602.7 billion, the highest since the fourth quarter of 2019. The broad rise in response to pent-up demand following the easing of business restrictions to slow the spread of COVID-19, was led by imports of passenger cars.
Imports of services rose $6.5 billion to $107.7 billion, mostly reflecting increases in fees for intellectual property, mainly licenses for research and development. There were also increases in sea freight transportation and personal travel.
Consumer spending grew at a historic 40.6 percent annualized rate in the July-September period, driven by more than $3 trillion in government pandemic relief.
Consumer spending contracted at a record 33.2 percent pace in the second quarter.