Current Account

The Current Account is a quarterly BEA balance in the International Transactions Accounts, the US system for resident and nonresident transactions. It is published by the Commerce Department economics agency and ranks as a Principal Federal Economic Indicator. Coverage means transactions between US residents and nonresidents, where residence means predominant economic interest for 1 year or more. Values are in current dollars for the reference quarter, and annual totals equal the sum of 4 quarters.

It is not trade alone, since it also includes primary income and secondary income. It excludes the capital account of one-time asset transfers, the financial account of cross-border investment flows, and end-period stock positions.

Preliminary statistics appear about 85 days after the reference quarter, at 8:30 AM Eastern Time. One release each year adds preliminary annual totals and revises seasonally adjusted quarters to match annual totals. Another release each year brings an annual update with new source data and revised methods.

Each new quarter then revises the earlier estimate as fuller source data arrive.

Each release also publishes capital and financial accounts, detail tables for goods, services and income, geographic splits, highlights and methods notes. BEA features seasonally adjusted data and reports the balance as a surplus when positive and a deficit when negative. The release describes the change in dollars and percent, with the share of current-dollar GDP and the main driver.

The balance moves when any of its 4 parts changes, and goods trade often drives the net result. Services and primary income have usually been in surplus, while goods and secondary income have usually been in deficit.

• Goods: physical items traded, measured from customs data adjusted to balance-of-payments concepts, in 6 end-use groups plus merchanting and nonmonetary gold.

• Services: paid activities in 12 categories, such as travel, transport, finance and business services, excluding most affiliate supply.

• Primary income: returns on work and investments, including direct and portfolio investment income plus employee compensation, linking GDP to GNI.

• Secondary income: one-way transfers such as remittances, taxes, aid and donations, with no return flow, excluding capital transfers.

1. Credits and debits: credits are exports of goods and services plus income receipts, while debits are imports plus income payments.

1. Sub-balances: each part equals credits minus debits, so goods equal exports minus imports, and services, primary and secondary income work the same way.

1. Total: the balance, CA, equals the sum of the 4 sub-balances, or credits minus debits, with positive as surplus and negative as deficit. In symbols, CA = (X_G - M_G) + (X_S - M_S) + (R_PI - P_PI) + (R_SI - P_SI).

1. Illustrative example: goods exports of 500 minus goods imports of 800 give a goods balance of -300.

Services exports of 220 minus imports of 160 give 60. Primary receipts of 280 minus payments of 245 give 35. Secondary receipts of 45 minus payments of 85 give -40. Credits total 1045 and debits total 1290, so 1045 minus 1290 equals -245, a deficit of 245.

This example is illustrative and uses the same currency units throughout. BEA shows current-dollar data with and without seasonal adjustment, using X-13ARIMA-SEATS on components before summation. This is not a weighted index, since each component enters at its current-dollar transaction value.