The Current State of US Economy (Essay Sample)

The US economy
The current account deficit in the US shrank to $217.9 billion, or 3.6% of the GDP in the fourth quarter of 2021 from an upwardly revised $219.9 billion in the prior period, matching market forecasts. The services surplus rose slightly to $49.9 billion from $49.8 billion in Q3, and the primary income surplus also went up to $48.2 billion from $41.9 billion. At the same time, the secondary income deficit shrank to $38 billion from $38.4 billion, mainly due to an increase in general government transfers, primarily fines and penalties and taxes on income and wealth.
The size of current account deficit/surplus is affected by several factors including:
* Exchange rate (overvalued exchange rate would cause large deficit)
* Level of consumer spending (economic growth) and hence import spending
* Capital flows to finance deficit in long-term
* Saving rates – influencing level of import