Today's Report (12/21/2021)

The U.S. current-account deficit, which reflects the combined balances on trade in goods and services and income flows between U.S. residents and residents of other countries, widened by $16.5 billion, or 8.3%, to $214.8 billion in the third quarter of 2021, according to statistics released today by the U.S. Bureau of Economic Analysis (BEA). The revised second-quarter deficit was $198.3 billion.

The third-quarter deficit was 3.7% of current-dollar gross domestic product, up from 3.5% in the second quarter.

The $16.5 billion widening of the current-account deficit in the third quarter reflected a reduced surplus on services and expanded deficits on secondary income and on goods that were partly offset by an expanded surplus on primary income.

Exports of goods and services to, and income received from, foreign residents increased $22.8 billion to $955.9 billion in the third quarter. Imports of goods and services from, and income paid to, foreign residents increased $39.3 billion to $1.17 trillion.

What is it?

Measures the United States' international trade balance in goods, services, and unilateral transfers on a quarterly basis. Readings in this report track trends in cross-border trade.

How does it affect the markets?

CURRENCY - Data can directly impact all the financial markets, but especially the foreign exchange value of the dollar. Trade imbalance creates a greater demand for foreign currencies.

STOCKS - Generally muted

BONDS - The bond market is very sensitive to the risk of importing inflation or deflation. A higher deficit suggests consumers and businesses are outspending their income.