The U.S. current account deficit widened sharply in the second quarter as the COVID-19 pandemic weighed on U.S. exports, the Commerce Department reported Friday.
The current account deficit, which reflects the combined balances on trade in goods and services and income flows between the United States and other countries, widened by 52.9 percent to 170.5 billion U.S. dollars in the second quarter, the department said.
That was equal to 3.5 percent of gross domestic product (GDP) in the second quarter, up from 2.1 percent in the first quarter.
The widening current account deficit in the second quarter mostly reflected “an expanded deficit on goods and reduced surpluses on primary income and on services,” the department said.
The department also noted that all major categories of current account transactions declined in the second quarter partly due to the pandemic, as “many businesses were operating at limited capacity or ceased operations completely, and the movement of travelers across borders was restricted.”
The U.S. economy contracted at an annual rate of 31.7 percent in the second quarter, the steepest decline since the government began keeping records in 1947.
A national survey from the Federal Reserve released earlier this month showed that the U.S. economy grew modestly over the summer amid continued uncertainty about the pandemic and its negative effect on consumer and business activities.
“Continued uncertainty and volatility related to the pandemic, and its negative effect on consumer and business activity, was a theme echoed across the country,” the survey said.