Strong U.S. dollar likely to keep current account deficit on a deepening path

US current account deficit widened to $113.5 bln in Q4 from $98.9 bln in the prior quarter (revised slightly from $100.3 bln). That's the largest deficit in 2½ years. 

As a share of GDP, the shortfall weighs in at 2.6%, 0.6 ppts wider than a year ago, but just slightly below the 40-year average. 

The goods & services deficit widened to $127.0 bln in the quarter from $123.9 bln, as real net exports carved 1.1 ppts from GDP growth. 

BMO Capital Markets notes ....

• While lower oil prices helped reduce the import bill, strong consumer demand and the surging U.S. dollar boosted non-energy import volumes. 
  
  
• Primary income also weakened to $50.6 bln from $59.8 bln in Q3, mainly on the back of lower direct investment income.
  
  
• We expect the strong U.S. dollar will likely keep the current account deficit on a deepening path in the year ahead.