Key Facts
• On June 24, 2025, the U.S. Commerce Department reported a Q1 current account deficit of $450.2 billion.
• The deficit increased by 44.3% from the previous quarter, marking the largest quarterly deficit on record.
• Economists had forecasted a deficit of $443.3 billion.
• The deficit accounted for 6.0% of GDP, up from 4.2% in Q4 2024.
• Goods trade deficit rose to $466 billion, driven by a $158.2 billion increase in imports, reaching $1 trillion.
• Exports of goods increased by $21.1 billion to $539 billion, led by aircraft and tech equipment.
• Service imports fell by $1.8 billion to $217.8 billion, while service exports dropped by $4.4 billion to $293.2 billion.
• Primary income receipts decreased by $22.9 billion to $355.1 billion, while payments fell by $13.7 billion to $362.7 billion.
• Secondary income receipts rose by $2.3 billion to $49.6 billion, with payments down by $8.4 billion to $101.5 billion.
• The Q4 2024 current account deficit was revised to $312 billion.
Summary
The U.S. current account deficit surged to a record $450.2 billion in Q1 2025, a 44.3% increase from the previous quarter. This rise was attributed to companies accelerating imports to avoid tariff hikes, with goods imports reaching $1 trillion. The deficit accounted for 6.0% of GDP, up from 4.2% in Q4 2024. While goods exports grew, service exports and imports declined. Economists warn that the growing current account and federal deficits could pose risks to the U.S. dollar.
