In Q2 2025, the US current-account deficit dropped by $188.5 billion (43%) to $251.3 billion, or 3.3% of GDP, mainly due to a sharp decline in goods imports. Exports rose to $1.27 trillion while imports fell to $1.53 trillion, driven by lower consumer goods and industrial supplies. Investment income and financial transactions increased, with the U.S. borrowing $406.9 billion from foreign entities, according to the Bureau of Economic Analysis. They write:
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, narrowed by $188.5 billion, or 42.9 percent, to $251.3 billion in the second quarter of 2025, according to statistics released today by the U.S. Bureau of Economic Analysis. The revised first-quarter deficit was $439.8 billion.
The second-quarter deficit was 3.3 percent of current-dollar gross domestic product, down from 5.9 percent in the first quarter.
The $188.5 billion narrowing of the current-account deficit in the second quarter primarily reflected a reduced deficit on goods.
Exports of goods and services to, and income received from, foreign residents increased $28.6 billion to $1.27 trillion in the second quarter. Imports of goods and services from, and income paid to, foreign residents decreased $159.9 billion to $1.53 trillion.1
Trade in goods (table 2)
Exports of goods increased $11.3 billion to $550.2 billion, reflecting an increase in nonmonetary gold. The increase was partly offset by a decrease in industrial supplies and materials. Imports of goods decreased $184.5 billion to $820.2 billion, reflecting decreases in nonmonetary gold, in consumer goods, and in industrial supplies and materials. (See “Additional Information” for a definition of nonmonetary gold under “Goods.”)
Trade in services (table 3)
Exports of services increased $2.1 billion to $301.6 billion, reflecting increases in financial services and in charges for the use of intellectual property. These increases were partly offset by a decrease in government goods and services. Imports of services increased $2.8 billion to $222.0 billion, reflecting increases in “other business services,” mainly technical, trade-related, and other business services, and in telecommunications, computer, and information services. These increases were partly offset by a decrease in transport.
Primary income (table 4)
Receipts of primary income (earned income) increased $17.8 billion to $376.1 billion, and payments of primary income increased $22.8 billion to $383.8 billion. The increases in both receipts and payments reflected increases in direct and portfolio investment income.
Secondary income (table 5)
Receipts of secondary income (current transfers) decreased $2.6 billion to $45.9 billion, reflecting a decrease in private transfers. Payments of secondary income decreased $1.0 billion to $99.2 billion, reflecting a decrease in general government transfers.
Financial-Account Transactions (Tables 1, 6, 7, and 8)
Net financial-account transactions were −$406.9 billion in the second quarter, reflecting net U.S. borrowing from foreign residents.
Financial assets (tables 1, 6, 7, and 8)
Second-quarter transactions increased U.S. residents’ foreign financial assets by $220.6 billion. Transactions increased “other investment assets” by $161.8 billion; portfolio investment assets by $45.2 billion; direct investment assets by $13.1 billion; and reserve assets by $0.6 billion.
Liabilities (tables 1, 6, 7, and 8)
Second-quarter transactions increased U.S. liabilities to foreign residents by $653.4 billion. Transactions increased portfolio investment liabilities by $452.5 billion; direct investment liabilities by $120.8 billion; and “other investment liabilities” by $80.1 billion.
Financial derivatives (table 1)
Net transactions in financial derivatives were $25.8 billion in the second quarter, reflecting net U.S. lending to foreign residents.
Updates to First-Quarter 2025 International Transactions Accounts Balances
Exports of goods and services to, and income received from, foreign residents increased $28.6 billion to $1.27 trillion in the second quarter. Imports of goods and services from, and income paid to, foreign residents decreased $159.9 billion to $1.53 trillion.1
