U.S. International Transactions: Third Quarter 2007

                                Current Account

        The U.S. current-account deficit--the combined balances on trade in
goods and services, income,  and net unilateral current transfers--decreased to
$178.5 billion (preliminary) in the third quarter of 2007 from $188.9 billion
(revised) in the second quarter.  Increases in the surpluses on income and on
services and a decrease in the deficit on goods more than accounted for the
decrease.  An increase in net unilateral current transfers to foreigners was
partly offsetting.

Goods and services

        The deficit on goods and services decreased to $173.2 billion in the
third quarter from $178.4 billion in the second.

        Goods

        The deficit on goods decreased to $199.7 billion in the third quarter
from $204.2 billion in the second.

        Goods exports increased to $297.9 billion from $279.3 billion.  The
largest increases were in capital goods; in foods, feeds, and beverages; in
nonagricultural industrial supplies and materials; and in automotive vehicles,
parts, and engines.

        Goods imports increased to $497.6 billion from $483.6 billion.  The
largest increases were in automotive vehicles, parts, and engines; in petroleum
and products; and in capital goods.

        Services

        The surplus on services increased to $26.5 billion in the third quarter
from $25.8 billion in the second.

        Services receipts increased to $119.8 billion from $117.2 billion.  The
increase was largely accounted for by an increase in travel.  Royalties and
license fees, other transportation (such as freight and port services), and
passenger fares also increased.

        Services payments increased to $93.2 billion from $91.4 billion.  The
largest increases were in travel, in other private services (such as business,
professional, and technical services, insurance services, and financial
services), in other transportation, and in passenger fares.

Income

        The surplus on income increased to $20.5 billion in the third quarter
from $12.7 billion in the second.

        Investment income

        Income receipts on U.S.-owned assets abroad increased to $204.9 billion
from $194.7 billion.  The increase was accounted for by increases in other
private receipts (which consists of interest and dividends) and in direct
investment receipts.

        Income payments on foreign-owned assets in the United States increased to
$182.7 billion from $180.4 billion.  Increases in other private payments
(which consists of interest and dividends) and in U.S. Government payments
(which consists of interest) were partly offset by a decrease in direct
investment payments.

        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 virtually unchanged at $2.4 billion.

Unilateral current transfers

        Net unilateral current transfers to foreigners were $25.8 billion in
the third quarter, up from $23.2 billion in the second.  The increase mainly
resulted from increases in U.S. Government grants and 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 $93.4 billion in the third quarter, down from $152.8 billion in the second.
Net foreign acquisitions of assets in the United States slowed more than net
U.S. acquisitions of assets abroad.

U.S.-owned assets abroad

        U.S.-owned assets abroad increased $155.7 billion in the third quarter,
following an increase of $465.5 billion in the second.

        U.S. claims on foreigners reported by U.S. banks increased $111.3
billion in the third quarter, following an increase of $211.0 billion in the
second.

        Net U.S. purchases of foreign securities were $78.8 billion in the
third quarter, down from $82.2 billion in the second.  Net U.S. purchases of
foreign stocks were $35.7 billion, down from $40.4 billion. Net U.S. purchases
of foreign bonds were $43.2 billion, up from $41.8 billion.

        Net financial flows for U.S. direct investment abroad were $56.3
billion in the third quarter, down from $78.0 billion in the second.  A
substantial slowdown in net equity capital investment abroad and a slightly
larger decrease in net intercompany debt investment abroad were partly offset
by a pickup in reinvested earnings.

        U.S. official reserve assets increased $0.1 billion in the third
quarter, following a decrease of less than $0.1 billion in the second.

Foreign-owned assets in the United States

        Foreign-owned assets in the United States increased $249.1 billion in
the third quarter, following an increase of $619.3 billion in the second.

        U.S. liabilities to foreigners reported by U.S. banks increased $69.8
billion in the third quarter, following an increase of $144.0 billion in the
second.

        Net foreign purchases of U.S. Treasury securities were $46.7 billion in
the third quarter, up from $1.8 billion in the second.

        Transactions in U.S. securities other than U.S. Treasury securities
shifted to net foreign sales of $44.2 billion in the third quarter from net
foreign purchases of $243.0 billion in the second.  Transactions in U.S. stocks
shifted to net foreign sales of $19.7 billion from net foreign purchases of
$104.1 billion.  Transactions in U.S. corporate bonds shifted to net foreign
sales of $8.2 billion from net foreign purchases of $109.7 billion.
Transactions in federally sponsored agency bonds shifted to net foreign sales
of $16.2 billion from net foreign purchases of $29.1 billion.

        Net financial flows for foreign direct investment in the United States
were $81.2 billion in the third quarter, up from $46.6 billion in the second.
The increase was accounted for by increases in net equity capital investment in
the United States and in reinvested earnings and by a shift from a decrease to
an increase in net intercompany debt investment in the United States.

        Foreign official assets in the United States increased $39.0 billion in
the third quarter, following an increase of $70.5 billion in the second.

        Net U.S. currency shipments to foreigners were $4.7 billion in the
third quarter, up from $3.3 billion in the second.

        The statistical discrepancy--errors and omissions in recorded
transactions--was a positive $85.6 billion in the third quarter, compared with
a positive $36.7 billion in the second.

        In the third quarter, the U.S. dollar depreciated 3 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
$188.9 billion from $190.8 billion.  The goods deficit was unrevised at $204.2
billion; the services surplus was revised to $25.8 billion from $26.5 billion;
the income surplus was revised to $12.7 billion from $9.4 billion; and
unilateral current transfers were revised to net outflows of $23.2 billion from
$22.5 billion.  Net recorded financial inflows were revised to $152.8 billion
from $150.9 billion.

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        Release dates in 2008:

        Fourth quarter and year 2007....................March 17, 2008 (Monday)
        First quarter 2008..............................June 17, 2008 (Tuesday)
        Second quarter 2008......................September 17, 2008 (Wednesday)
        Third quarter 2008........................December 17, 2008 (Wednesday)

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