WASHINGTON: The US current account deficit narrowed sharply in the third quarter as exports jumped to a record high, data showed on Wednesday.

The Commerce Department said that the current account deficit, which measures the flow of goods, services and investments into and out of the country, contracted 9.1% to $217.1 billion last quarter. That was the smallest gap since the second quarter of 2021.

The current account gap represented 3.4% of gross domestic product, down from 3.8% in the second quarter. That was the smallest share in two years. The deficit peaked at 6.3% of GDP in the fourth quarter of 2005.

The United States is now a net exporter of crude oil and fuel. Though the deficit remains wide, it has no impact on the dollar given its status as the reserve currency.

Exports of goods increased $7.2 billion to a record $547.0 billion, boosted by non-monetary gold and capital goods such as civilian aircraft engines and parts as well as other industrial machinery. But soybean and corn exports fell.

Imports of goods dropped $32.5 billion to $818.2 billion, pulled down by widespread decreases in consumer goods and industrial supplies and materials. The decline in consumer goods was led by household and kitchen appliances and other household goods. Imports have slowed as businesses assess their inventory needs amid cooling domestic demand against the backdrop of aggressive interest rate increases from the Federal Reserve.

The resulting smaller trade deficit was one of the drivers of the rebound in economic growth in the third quarter, adding nearly three percentage points to the 2.9% annualized rate of increase in gross domestic product.

Primary income receipts increased $15.2 billion to $314.0 billion, while primary income payments rose $26.8 billion to $268.4 billion. The increases in both receipts and payments was largely driven by interest on loans and deposits, which were boosted by the Fed’s rate hikes.

Secondary income receipts fell $0.8 billion to $42.7 billion amid a decrease in general government transfers, mostly fines and penalties. Secondary income payments increased $9.0 billion to $94.9 billion, reflecting a rise in general government transfers, mostly international cooperation.