Aided by COVID-19, U.S. current account deficit rose 35% in 2020

March 23 (UPI) -- The U.S. current account deficit grew by 4.2% in the final quarter of 2020, aided by the COVID-19 pandemic, the Commerce Department said Tuesday.

The department said the deficit rose $7.6 billion to $188 billion between October and January.

Current account deficits reflect combined balances on trade in goods and services and income flows from U.S. and foreign residents.

The report said the expanding deficit mostly reflected a wider deficit on goods and a reduced surplus on services, but was partially offset by a lower deficit in secondary income.

"Nearly all major categories of current account transactions increased in the fourth quarter of 2020, the second consecutive quarter of broad-based growth following notable COVID-19-related declines in the second quarter of 2020," the report said.

"The full economic effects of the COVID-19 pandemic cannot be quantified in the statistics because the impacts are generally embedded in source data and cannot be separately identified."

For all of 2020, the U.S. current account deficit increased 35% to $647 billion and accounted for 3.1% of current-dollar gross domestic product.