U.S. International Transactions: First Quarter 2011

                                Current Account


      The U.S. current-account  deficit—the combined balances on trade in goods and
services,  income, and net unilateral current transfers—increased to $119.3 billion
(preliminary) in the first quarter of 2011, from $112.2 billion (revised) in the fourth
quarter of 2010.  The increase was more than accounted for by an increase in the deficit
on goods.  Increases in the surplus on income and the surplus on services and a decrease
in net unilateral current transfers were partly offsetting.

Goods and services

      The deficit on goods and services increased to $140.8 billion in the first quarter
from $118.7 billion in the fourth.

      Goods

      The deficit on goods increased to $182.5 billion in the first quarter from $159.2
billion in the fourth.

      Goods exports increased to $361.3 billion from $342.7 billion.  Most major end-use
categories increased; industrial supplies and materials accounted for nearly 80 percent
of the increase. The increase in industrial supplies and materials mainly reflected growth
in petroleum and products and in nonferrous metals. Automotive vehicles, parts, and engines
also increased strongly.  (See Table 2a
(http://www.bea.gov/international/bp_web/simple.cfm?anon=71&table_id=20&area_id=3)
for the latest available statistics.)

      Goods imports increased to $543.8 billion from $501.9 billion.  Most major end-use
categories increased; two-thirds of the increase was accounted for by gains in industrial
supplies and materials.  Gains in automotive vehicles, parts, and engines also contributed.
Industrial supplies and materials increased substantially as a result of strong growth in
petroleum and products.  Automotive vehicles, parts, and engines increased mostly as a result
of increases in passenger cars and in other parts and accessories.
(See Table 2a (http://www.bea.gov/international/bp_web/simple.cfm?anon=71&table_id=20&area_id=3)
for the latest available statistics.)

      Services

      The surplus on services increased to $41.7 billion in the first quarter from $40.5
billion in the fourth.

      Services receipts increased to $144.9 billion from $142.1 billion.  The largest
increases were in other private services and in travel.

      Services payments increased to $103.2 billion from $101.6 billion.  The largest
increases were in other transportation and in other private services.

Income

      The surplus on income increased to $54.8 billion in the first quarter from $39.9 billion
in the fourth.

      Investment income

      Income receipts on U.S.-owned assets abroad increased to $176.7 billion from $170.9
billion.  Most of the increase was accounted for by direct investment receipts.  Other private
receipts (which consists of interest and dividends) also increased.

      Income payments on foreign-owned assets in the United States decreased to $119.6 billion
from $128.7 billion.  The decrease was more than accounted for by a decrease in direct
investment payments.  An increase in other private payments (which consists of interest and
dividends) was partly offsetting.

      Compensation of employees

      Receipts for compensation of U.S. workers abroad increased slightly to $1.4 billion in
the first quarter from $1.3 billion in the fourth.  Payments for compensation of foreign workers
in the United States remained at $3.6 billion.

Unilateral current transfers

      Net unilateral current transfers to foreigners were $33.2 billion in the first quarter,
down from $33.4 billion in the fourth.  The decrease was more than accounted for by U.S.
government grants; an increase in private remittances and other transfers was partly offsetting.

                                 Capital Account

      Net capital account payments remained close to zero in the first quarter.

                                Financial Account

      Net financial inflows were $181.9 billion in the first quarter, up from $29.3 billion
in the fourth.  Growth in both foreign-owned assets in the United States and U.S.-owned assets
abroad increased from that of the fourth quarter; however, the increase in foreign-owned assets
was greater than that of U.S.-owned assets.

U.S.-owned assets abroad

      U.S.-owned assets abroad increased $325.2 billion in the first quarter, following an
increase of $236.8 billion in the fourth.

      U.S. claims on foreigners reported by U.S. banks and securities brokers increased $89.3
billion in the first quarter, following an increase of $94.6 billion in the fourth.  (Examples
of these claims are U.S. banks’ deposits at foreign banks and U.S. banks’ loans to foreigners.)

      Net U.S. purchases of foreign securities were $58.5 billion in the first quarter following
net U.S. purchases of $43.4 billion in the fourth.  Net U.S. purchases of foreign stocks picked
up to $49.0 billion from $28.7 billion, their strongest level since the third quarter of 2007.
Net purchases of foreign bonds slowed to $9.5 billion from $14.7 billion.  (See Table 8a
(http://www.bea.gov/international/bp_web/simple.cfm?anon=71&table_id=17) for the latest available
statistics.)

      U.S. direct investment abroad was $86.5 billion in the first quarter, down from $93.0
billion in the fourth.  The decrease resulted from decreases in reinvested earnings and in net
intercompany debt investment.  A decrease in equity inflows was partly offsetting.  (See Table 7a
(http://www.bea.gov/international/bp_web/simple.cfm?anon=90730&table_id=18&area_id=3) for the latest
available statistics.)

      U.S. claims on unaffiliated foreigners reported by U.S. nonbanking concerns increased
$86.8 billion in the first quarter, following an increase of $5.7 billion in the fourth.

      U.S. official reserve assets increased $3.6 billion in the first quarter, following a
decrease of $0.2 billion in the fourth. The first quarter increase resulted from an increase
in the U.S. reserve position in the International Monetary Fund.

      U.S. government assets other than official reserve assets increased $0.6 billion in the
first quarter, following an increase of $0.2 billion in the fourth.

Foreign-owned assets in the United States

      Foreign-owned assets in the United States increased $507.1 billion in the first quarter,
following an increase of $266.6 billion in the fourth.

      U.S. liabilities to foreigners reported by U.S. banks and securities brokers (other than
foreign official assets) increased $363.7 billion in the first quarter, following an increase
of $30.2 billion in the fourth.  (Examples of these liabilities are deposits of foreign
residents at banks in the United States and loans by banks abroad to banks in the United States.)
Most of the increase was due to a pickup in liabilities for own accounts. (See Table 11a
(http://www.bea.gov/international/bp_web/simple.cfm?anon=71&table_id=14) for the latest
available statistics.)

      Net private foreign purchases of U.S. Treasury securities were $3.5 billion in the first
quarter, down from $29.5 billion in the fourth.

      Net private foreign sales of U.S. securities other than U.S. Treasury securities were
$7.2 billion in the first quarter, a shift from net purchases of $48.4 billion in the fourth.
Net foreign sales of U.S. federally sponsored agency bonds were $36.6 billion in the first
quarter, a shift from net purchases of $3.2 billion in the fourth.  Net foreign sales of U.S.
corporate bonds were $4.6 billion, also a shift from net purchases of $8.2 billion.  Net foreign
purchases of U.S. stocks decreased to $33.9 billion from $37.1 billion.  (See Table 8a
(http://www.bea.gov/international/bp_web/simple.cfm?anon=71&table_id=17) for the latest
available statistics.)

      Foreign direct investment in the United States was $25.3 billion in the first quarter,
following investment of $70.6 billion in the fourth.  The largest contributors to the decrease
were a shift from inflows to outflows of intercompany debt investment in the United States and
a slowing of equity inflows. Lower reinvested earnings also contributed to the decrease.  (See
Table 7a (http://www.bea.gov/international/bp_web/simple.cfm?anon=71&table_id=18&area_id=3)
for the latest available statistics.)

      U.S. liabilities to unaffiliated foreigners reported by U.S. nonbanking concerns increased
$38.4 billion in the first quarter, following an increase of $16.8 billion in the fourth.

      Foreign official assets in the United States increased $70.9 billion in the first quarter,
following an increase of $57.8 billion in the fourth.

      Net shipments of U.S. currency to foreign countries were $12.6 billion in the first quarter,
down from $13.4 billion in the fourth.

      The statistical discrepancy—net errors and omissions in recorded transactions—was -$62.6
billion in the first quarter compared with $82.8 billion in the fourth.

      In the first quarter, the U.S. dollar depreciated 1.4 percent on a trade-weighted quarterly
average basis against a group of 7 major currencies.  (Data are based on Federal Reserve Statistical
Release H.10.)

                                     Revisions

      Statistics from the U.S. international transactions accounts have been revised to incorporate
several changes in definitions and classifications, most of which result from a multiyear effort to
modernize and enhance BEA's international economic accounts.  In addition, the revisions reflect
newly available source data and improved estimating methodologies.  An article
(http://www.bea.gov/scb/toc/0511cont.htm) in the May 2011 issue of the SURVEY OF CURRENT BUSINESS
describing this effort is available on BEA's Web site.  Key changes introduced in this annual revision are
summarized below.

      Definitions and classifications

    * Receipts and payments for cruise fares are reclassified within services from passenger
      fares to travel beginning with statistics for 1999. This change aligns the treatment of cruise
      fares with that of similar expenditures related to land travel, such as accommodations, meals,
      and entertainment.

    * Receipts and payments for the distribution rights for film and television recordings are
      reclassified within services from “other” private services to royalties and license fees
      beginning with statistics   for 1999 to more closely align with international guidelines.

    * Receipts and payments for postal services are reclassified within services from U.S.
      government miscellaneous services to “other” transportation beginning with statistics for
      1999. This change is consistent with the classification of government services transactions
      according to the type of service performed.

    * The recording of U.S. government income on holdings and allocations of special drawing rights
      (SDRs) is changed from a net basis to a gross basis beginning with statistics for 2003.
      Previously, income flows associated with U.S. government holdings and allocations of SDRs were
      included in “U.S. government receipts” on a net basis; that is, the amount recorded equaled
      interest receipts on SDR holdings net of interest payments on SDR allocations.  Interest receipts
      are now recorded in “U.S. government receipts,” and interest payments are now recorded in “U.S.
      government payments.”

      Source data and methodologies

    * Exports and imports of goods on a balance of payments basis are revised beginning with quarterly
      statistics for 1999 to introduce new seasonally adjusted balance of payments adjustments—
      adjustments that BEA applies to goods on a Census basis to convert them to a balance of payments
      basis.  Adjustments to low-value goods are introduced for 1999-2006 and are revised for 2007-2009.
      Adjustments for goods procured in ports by carriers are revised for exports beginning with
      statistics for 2007 and for imports beginning with statistics for 2004.  Other significant
      revisions to the adjustments, resulting from updated source data, begin with statistics for 2008.

    * Services receipts are revised beginning with statistics for 1999 to implement an improved method
      for measuring expenditures in the United States of foreign residents who work in the United
      States for less than one year and to exclude expenditures of foreign nationals who work for
      international organizations located in the United States.  Services payments are revised
      beginning with statistics for 2004 to incorporate an improved method for measuring non-fuel
      expenditures of U.S. air carriers in foreign ports.  Services receipts and payments are also
      revised to incorporate updated source data, including newly available data from BEA’s quarterly
      services surveys beginning with statistics for 2008 and initial results of BEA’s benchmark
      survey of international financial services transactions beginning with statistics for 2007.

    * For foreign securities, financial flows and interest receipts for foreign bonds and dividend
      receipts for foreign stocks are revised for 2009-2010 to incorporate results of the U.S.
      Treasury Department’s annual survey of securities claims for December 2009 and other new
      source data.

    * For U.S. securities, financial flows and interest payments for U.S. corporate bonds, U.S.
      Treasury bonds, and U.S. agency bonds and dividend payments for U.S. stocks are revised for
      2009-2010 to incorporate results of the U.S. Treasury Department’s annual survey of securities
      liabilities for June 2010 and other new source data.

    * Financial flows and related income payments are revised for 2007-2010 to incorporate the
      results of BEA’s 2007 benchmark survey of foreign direct investment in the United States
      along with updated and revised quarterly and annual data from BEA’s surveys of foreign direct
      investment in the United States.  Similarly, financial flows and related income receipts are
      revised for 2008-2010 to incorporate updated and revised data from BEA’s quarterly and annual
      surveys of U.S. direct investment abroad.

      The U.S. net international investment position preliminary statistics for 2010 and revised
statistics for earlier years will be released on June 28.

      The fourth-quarter 2010 international transactions are revised from previously published
statistics.  The current-account deficit was revised down to $112.2 billion from $113.3 billion.
The goods deficit was revised up to $159.2 billion from $156.2 billion; the services surplus was
revised up to $40.5 billion from $39.5 billion; the income surplus was revised up to $39.9 billion
from $38.6 billion; and unilateral current transfers were revised to net outflows of $33.4 billion
from $35.2 billion.  Net financial inflows were revised to $29.3 billion from $32.4 billion.

                                   *          *          *

      Release dates in 2011:

      Fourth quarter and year 2010...................................March 16, 2011 (Wednesday)
      First quarter 2011...............................................June 16, 2011 (Thursday)
      Second quarter 2011.........................................September 15, 2011 (Thursday)
      Third quarter 2011...........................................December 15, 2011 (Thursday)

                                   *          *          *

      BEA’s national, international, regional, and industry statistics; the SURVEY OF CURRENT BUSINESS;
and BEA news releases are available without charge on BEA’s Web site (http://www.bea.gov/) at www.bea.gov.
By visiting the site, you can also subscribe to receive free e-mail summaries of BEA releases and announcements.

_________________

The statistics of the U. S. international transactions accounts released today have been revised through the
fourth quarter of 2010.  The revisions reflect several changes in definitions and classifications, part of a
multiyear effort to align the international transactions accounts with international statistical standards.
For example, receipts and payments for the distribution rights for film and television recordings, previously
recorded in "other" private services, have been reclassified to royalties and license fees. (See the section
on "Revisions" in this release.)

The July SURVEY OF CURRENT BUSINESS will contain tables and an article describing revisions to the international
transactions accounts.  On June 28, BEA will release U.S. net international investment position preliminary
statistics for 2010 and revised statistics for 2007-2009.  The release will also include a discussion of
revisions to those accounts.  A more detailed discussion of the U.S. international investment position and the
revisions of those accounts will appear in the July SURVEY OF CURRENT BUSINESS.


NOTE: This news release is available on BEA’s Web site (http://www.bea.gov/) along with Highlights
(http://www.bea.gov/newsreleases/international/transactions/2011/pdf/trans111_fax.pdf) related to this release.
The latest detailed statistics (http://www.bea.gov/international/bp_web/list.cfm?anon=71&registered=0) for U.S.
international transactions are also available on BEA’s Web site.  The first quarter statistics in this release
are preliminary and will be revised on September 15, 2011; at that time, the latest available statistics may differ
from those in this release.  All links in the text of this release refer to the latest available statistics.