Q1 2019 Missed Forecast as Q4 2018 Revised Sharply Higher to $-143.9 B
The U.S. current-account deficit fell to $130.4 billion (prelim) in the first quarter (Q1) of 2019 from a revised $143.9 billion in Q4 2018. As a percentage of U.S. gross domestic product (GD), the deficit fell to 2.5% from 2.8%.
The previously published current-account deficit for Q4 2018 was $134.4 billion. The $13.5 billion drop in the current-account deficit largely reflects a decline in the deficit on goods. That was partly offset by an increase in the deficit on secondary income.
| Indicator | Prior | Prior Revised | Consensus Forecast | Forecast Range | Actual |
| Current Account | $-134.4 B | $-143.9 B | $-124.3 B | $-129.0 B to $-118.0 B | $-130.4 B |
Exports of goods and services and income receipts rose $7.2 billion in Q1 2019 to $945.9 billion, while imports of goods and services and income payments fell $6.3 billion to $1.08 trillion.
Largely the result of the Tax Cuts and Jobs Act (TJCA) — President Donald Trump’s signature legislative achievement and the first overhaul to the U.S. tax code in 31 years — dividends were $100.2 billion, while reinvested earnings were $40.2 billion in Q1 2019.
| 2017 | 2017 | 2017 | 2017 | 2018 | 2018 | 2018 | 2018 | 2019 | |
| Q1r | Q2r | Q3r | Q4r | Q1r | Q2r | Q3r | Q4r | Q1p | |
|---|---|---|---|---|---|---|---|---|---|
| Direct Investment Earnings | 114.7 | 115.4 | 122.2 | 130.7 | 134.3 | 139.4 | 139.2 | 134.0 | 140.5 |
| Dividends | 38.2 | 34.9 | 55.1 | 26.9 | 285.9 | 223.8 | 120.2 | 146.6 | 100.2 |
| Reinvested earnings | 76.5 | 80.5 | 67.1 | 103.8 | −151.6 | −84.4 | 18.9 | −12.6 | 40.2 |
| p Preliminary | r Revised |
A sharp narrowing of the U.S. trade deficit, particularly the goods deficit, has driven the stronger than expected annualized rate for the advance and second estimate on Q1 2019 GDP.
The politically-sensitive U.S.-China trade deficit declined $22.9 billion to just over $80.9 billion in Q1 2019.
| International Transactions Accounts (Q4 2018) | Preliminary | Revised |
| Current-account balance | −134.4 | −143.9 |
| Goods balance | −233.1 | −232.3 |
| Services balance | 66.1 | 61.2 |
| Primary-income balance | 60.4 | 60.1 |
| Secondary-income balance | −27.8 | −32.8 |
| Capital-account balance | 8.9 | 2.7 |
| Net lending (+)/borrowing (–) from financial-account transactions | −168.3 | −161.6 |
