By Lucia Mutikani
WASHINGTON (Reuters) -The U.S. current account deficit surged to its highest level in more than 12 years in the third quarter as a record rebound in consumer spending pulled in imports, outpacing a recovery in exports.
The Commerce Department said on Friday the current account deficit, which measures the flow of goods, services and investments into and out of the country, widened 10.6% to $178.5 billion last quarter. That was the highest since the second quarter of 2008.
Data for the second quarter was revised to show a $161.4 billion shortfall, instead of $170.5 billion as previously reported. Economists polled by Reuters had forecast the current account gap increasing to $189.0 billion in the July-September quarter.
The current account gap represented 3.4% of gross domestic product in the third quarter. That was up from 3.3% in the April-June quarter and the largest since the fourth quarter of 2008. Still, the deficit remains below a peak of 6.3% of GDP in the fourth quarter of 2005 as the United States is now a net exporter of crude oil and fuel.
Imports of goods increased $94.4 billion to $602.7 billion, the highest since the fourth quarter of 2019. The broad rise in response to pent-up demand following the easing of business restrictions to slow the spread of COVID-19, was led by imports of passenger cars.
Imports of services rose $6.5 billion to $107.7 billion, mostly reflecting increases in fees for intellectual property, mainly licenses for research and development. There were also increases in sea freight transportation and personal travel.
Consumer spending grew at a historic 40.6% annualized rate in the July-September period, driven by more than $3 trillion in government pandemic relief. Consumer spending contracted at a record 33.2% pace in the second quarter.
Exports of goods rebounded $68.4 billion to $357.1 billion last quarter. The broad increase in exports was led by shipments of motor vehicles, parts and engines. Exports plunged in the April-June period amid coronavirus shutdowns overseas.
Exports of services gained $2.8 billion to $164.8 billion. That mainly reflected an increase in fees for research and development licenses. But education-related travel declined.
Primary income receipts rose $26.8 billion to $238.7 billion, driven by investment income, mostly earnings.
Secondary income climbed $1.4 billion to $35.3 billion, lifted by an increase in private sector fines and penalties.