WASHINGTON — The second quarter current account balance was a $98.5 billion deficit (-2.3% of GDP), well below private estimates.
This represented a good narrowing from a $102.1 billion deficit after revisions in Q1 (-2.4% of GDP). Both numbers benefitted from new data methodologies introduced a few months ago.
The Q2 C/A reflects a wider trade deficit but a larger $53.1 billion surplus on income (now called the primary surplus) and $21.4 billion in transfers.
The deficit was funded in Q2 by $74.1 billion in debt buying from abroad, composed of sales in T-bills but $101.3 billion in buys in coupons. There also was $72 billion in direct investment made via net equity investment. The latter suggests overseas firms still view the U.S. corporate sector as a good investment opportunity.
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