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      The U.S. current-account deficit--the combined balances on trade in goods
and services, income,  and net unilateral current transfers--decreased to
$174.1 billion (preliminary) in the third quarter of 2008 from $180.9 billion
(revised) in the second quarter.  The decrease was accounted for by increases
in the surpluses on income and on services and decreases in the deficit on
goods and in net unilateral current transfers to foreigners.

Goods and services

      The deficit on goods and services decreased to $176.5 billion in the
third quarter from $180.1 billion in the second.

      Goods

      The deficit on goods decreased to $214.7 billion in the third
quarter from $216.3 billion in the second.

      Goods exports increased to $346.5 billion from $337.3 billion.  More than
half of the increase was accounted for by a rise in industrial supplies and
materials, largely reflecting increases in energy products and in chemicals.
Automotive vehicles and parts, capital goods, and consumer goods also increased.

      Goods imports increased to $561.2 billion from $553.6 billion.  The
increase was more than accounted for by an increase in petroleum and products.
Nonpetroleum products decreased slightly, as decreases in automotive vehicles
and parts and in capital goods were largely offset by increases in nonpetroleum
industrial supplies and materials and in consumer goods.

      Services

      The surplus on services increased to $38.2 billion in the third quarter
from $36.2 billion in the second.

      Services receipts increased to $142.5 billion from $138.2 billion.  The
increase was largely accounted for by increases in travel, in other private
services (which includes items such as business, professional, and technical
services, insurance services, and financial services), in passenger fares, and
in royalties and license fees.

      Services payments increased to $104.3 billion from $101.9 billion.  The
increase was largely accounted for by increases in royalties and license fees
and in other private services.

Income

      The surplus on income increased to $30.8 billion in the third quarter
from $28.2 billion in the second.

      Investment income

      Income receipts on U.S.-owned assets abroad decreased to $193.9 billion
from $195.7 billion.  The decrease was more than accounted for by a decrease in
direct investment receipts.  In contrast, other private receipts (which
consists of interest and dividends) and U.S. government receipts increased.

      Income payments on foreign-owned assets in the United States decreased to
$161.3 billion from $165.7 billion.  The decrease was more than accounted for
by decreases in direct investment payments and in U.S. government payments.  In
contrast, other private payments increased.

      Compensation of employees

      Receipts for compensation of U.S. workers abroad were virtually unchanged
at $0.7 billion, and payments for compensation of foreign workers in the United
States were also virtually unchanged, at $2.5 billion.

Unilateral current transfers

      Net unilateral current transfers to foreigners were $28.4 billion in the
third quarter, down from $29.0 billion in the second.  The decrease was largely
accounted for by a decrease in private remittances and other transfers.

                                Capital Account

      Net capital account payments (outflows) were virtually unchanged at $0.6
billion in the third quarter.

                               Financial Account

      Net financial inflows--net acquisitions by foreign residents of assets in
the United States less net acquisitions by U.S. residents of assets abroad--
were $135.2 billion in the third quarter, up from $122.9 billion in the second.
Net acquisitions by foreign residents of assets in the United States picked up,
and transactions by U.S. residents resulted in a smaller decrease in U.S.-owned
assets abroad in the third quarter than in the second quarter.

U.S.-owned assets abroad


      U.S.-owned assets abroad decreased $9.5 billion in the third quarter,
following a decrease of $102.7 billion in the second.

      U.S. claims on foreigners reported by U.S. banks decreased $152.0 billion
in the third quarter, following a decrease of $213.9 billion in the second.

      Transactions in foreign securities shifted to net U.S. sales of $86.8
billion in the third quarter from net U.S. purchases of $33.6 billion in the
second.  Transactions in foreign stocks shifted to net U.S. sales of $14.8
billion from net U.S. purchases of $21.4 billion.  Transactions in foreign
bonds shifted to net U.S. sales of $72.0 billion from net U.S. purchases of
$12.2 billion.

      U.S. direct investment abroad increased $56.9 billion in the third
quarter, following an increase of $84.0 billion in the second.  The slowdown
resulted from a shift from an increase to a decrease in net intercompany debt
investment abroad and a slowdown in reinvested earnings.  In contrast, net
equity capital investment picked up.

      U.S. official reserve assets increased $0.2 billion in the third quarter,
following an increase of $1.3 billion in the second.

      U.S. government assets other than official reserve assets increased
$226.0 billion in the third quarter, following an increase of $41.6 billion in
the second.  The exceptionally large third-quarter increase resulted from
drawings on temporary reciprocal currency arrangements between the U.S. Federal
Reserve System and foreign central banks that do not meet the strict definition
of U.S. reserve assets.

Foreign-owned assets in the United States

      Foreign-owned assets in the United States increased $125.7 billion in the
third quarter, following an increase of $22.7 billion in the second.

      U.S. liabilities to foreigners reported by U.S. banks decreased $147.9
billion in the third quarter, following a decrease of $256.6 billion in the
second.

      Net foreign purchases of U.S. Treasury securities were $89.5 billion in
the third quarter, up from $65.7 billion in the second.

      Transactions in U.S. securities other than U.S. Treasury securities
shifted to net foreign sales of $89.2 billion in the third quarter from net
foreign purchases of $17.1 billion in the second.  The shift largely resulted
from a shift to net foreign sales of $34.7 billion of U.S. corporate bonds from
net foreign purchases of $50.6 billion.  In addition, net foreign sales of U.S.
federally sponsored agency bonds were $57.0 billion, up from $32.8 billion.  In
contrast, transactions in U.S. stocks shifted to net foreign purchases of $2.5
billion from net foreign sales of $0.7 billion.

      Foreign direct investment in the United States increased $66.1 billion in
the third quarter, following an increase of $105.3 billion in the second.  The
slowdown almost entirely resulted from a slowdown in net intercompany debt
investment in the United States.  In addition, reinvested earnings fell
slightly.  In contrast, net equity capital investment in the United States
picked up.

      Foreign official assets in the United States increased $117.7 billion in
the third quarter, following an increase of $145.4 billion in the second.

      Net U.S. currency shipments to foreigners were $5.8 billion in the third
quarter, up from $0.2 billion in the second.

      The statistical discrepancy--errors and omissions in recorded
transactions--was a positive $39.5 billion in the third quarter, compared with
a positive $58.7 billion in the second.

      In the third quarter, the U.S. dollar appreciated 4 percent on a trade-
weighted quarterly average basis against a group of 7 major currencies.

                                   Revisions

      The second-quarter international transactions are revised from previously
published estimates.  The current-account deficit was revised to $180.9 billion
from $183.1 billion.  The goods deficit was unrevised at $216.3 billion; the
services surplus was revised to $36.2 billion from $35.8 billion; the income
surplus was revised to $28.2 billion from $27.3 billion; and unilateral current
transfers were revised to net outflows of $29.0 billion from $29.9 billion.
Net financial inflows were revised to $122.9 billion from $136.7 billion.

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      Release dates in 2009:

      Fourth quarter and year 2008...................March 18, 2009 (Wednesday)
      First quarter 2009..............................June 17, 2009 (Wednesday)
      Second quarter 2009........................September 16, 2009 (Wednesday)
      Third quarter 2009..........................December 16, 2009 (Wednesday)

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