US Current Account Deficit Narrows from Record High

The United States current account deficit narrowed by $188.5 billion, or 42.9%, to $251.3 billion from the record-high gap in the previous quarter in the second quarter of 2025, broadly aligned with market expectations of a $250 billion deficit. The reduction in the gap was mostly due to a narrowing in the goods deficit to $270.0 billion from $265.8 billion after firms pared back on imports after front-loading foreign purchases to dodge aggressive tariffs passed by the US Presidential Administration. In the meantime, the services surplus was marginally lower at $79.6 billion from $80.3 billion. The primary account deficit widened to $7.7 billion from $2.6 billion and the secondary income deficit widened to $53.2 billion from $51.7 billion.