FOR WIRE TRANSMISSION: 8:30 A.M. EDT, THURSDAY, September 15, 2011 Sarah P. Scott: (202) 606-9286 BEA 11-46 U.S. International Transactions: Second 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—decreased to $118.0 billion (preliminary) in the second quarter of 2011, from $119.6 billion (revised) in the first quarter. The decrease was more than accounted for by increases in the surplus on income and the surplus on services. Increases in the deficit on goods and in net unilateral current transfers were partly offsetting. Goods and services The deficit on goods and services increased to $145.0 billion in the second quarter from $140.0 billion in the first. Goods The deficit on goods increased to $190.4 billion in the second quarter from $182.2 billion in the first. Goods exports increased to $373.1 billion from $361.5 billion. All major end-use categories increased; industrial supplies and materials and capital goods accounted for most of the increase. The increase in industrial supplies and materials mostly reflected growth in petroleum and products and in chemicals. Capital goods increased largely as a result of gains in machinery and equipment (Table 2a (http://www.bea.gov/international/bp_web/simple.cfm ?anon=71&table_id=20&area_id=3)). Goods imports increased to $563.5 billion from $543.8 billion. Most major end-use categories increased; nearly three-fourths of the increase was accounted for by increases in industrial supplies and materials, mostly as a result of growth in petroleum and products and in iron and steel products. Capital goods rose as a result of growth in computers, peripherals, and parts. A decrease in automotive vehicles, parts, and engines, primarily due to a drop in passenger cars, was partly offsetting (Table 2a (http://www.bea.gov/international/bp_web/simple.cfm?anon=71&table_id=20&area_id=3)). Services The surplus on services increased to $45.4 billion in the second quarter from $42.3 billion in the first. Services receipts increased to $150.7 billion from $146.0 billion. The largest increases were in travel and in other private services. Most of the other services categories also increased. Services payments increased to $105.2 billion from $103.8 billion. The largest increases were in travel, in other transportation, and in other private services. Income The surplus on income increased to $61.1 billion in the second quarter from $52.7 billion in the first. Investment income Income receipts on U.S.-owned assets abroad increased to $191.6 billion from $178.9 billion. The increase was mostly accounted for by increases in direct investment receipts and in other private receipts (which consists of interest and dividends). Income payments on foreign-owned assets in the United States increased to $128.2 billion from $124.0 billion. Most of the increase was accounted for by an increase in direct investment payments. Compensation of employees Receipts for compensation of U.S. workers abroad remained at $1.4 billion. 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 $34.2 billion in the second quarter, up from $32.3 billion in the first. The increase was more than accounted for by an increase in U.S. government grants. Capital Account Net capital account payments were $0.8 billion in the second quarter, up from near zero over the previous two quarters. Financial Account Net financial inflows were $25.7 billion in the second quarter, down from $156.1 billion in the first. The slowdown resulted from a steep reduction in the growth of foreign-owned assets in the United States that more than offset a reversal from an increase to a decrease in U.S.-owned assets abroad. U.S.-owned assets abroad U.S.-owned assets abroad decreased $22.9 billion in the second quarter, following an increase of $334.4 billion in the first. U.S. claims on foreigners reported by U.S. banks and securities brokers decreased $195.7 billion in the second quarter, following an increase of $87.8 billion in the first. (Examples of these claims are U.S. banks’ deposits at foreign banks and U.S. banks’ loans to foreigners.) Most of the decrease resulted from a substantial decrease in claims for own accounts, particularly in deposits abroad (Table 10a (http://www.bea.gov/international/bp_web/simple.cfm ?anon=71&table_id=13)). Net U.S. purchases of foreign securities were $30.1 billion in the second quarter, following net purchases of $58.2 billion in the first. Net purchases of foreign stocks slowed to $26.7 billion from $47.1 billion. Net purchases of foreign bonds were $3.4 billion, down from $11.0 billion (Table 8a (http://www.bea.gov/international/bp_web/simple.cfm?anon=71&table_id=17)). U.S. direct investment abroad was $134.1 billion in the second quarter, up from $89.2 billion in the first. The increase resulted in large part from increases in equity investment, along with smaller increases in intercompany debt investment and reinvested earnings (Table 7a (http://www.bea.gov/international/bp_web/simple.cfm?anon=90730&table_id=18&area_id=3)). U.S. claims on unaffiliated foreigners reported by U.S. nonbanking concerns increased $0.9 billion in the second quarter, following an increase of $95.0 billion in the first. U.S. official reserve assets increased $6.3 billion in the second quarter, following an increase of $3.6 billion in the first. The increase was mostly a result of an increase in the reserve position in the International Monetary Fund. U.S. government assets other than official reserve assets increased $1.4 billion in the second quarter, following an increase of $0.5 billion in the first. Foreign-owned assets in the United States Foreign-owned assets in the United States increased $2.8 billion in the second quarter, following an increase of $487.2 billion in the first. U.S. liabilities to foreigners reported by U.S. banks and securities brokers (other than foreign official assets) decreased $101.0 billion in the second quarter, following an increase of $354.4 billion in the first. (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.) All of the decrease resulted from a decline in liabilities for own accounts, particularly in loan positions from foreigners. (Table 11a (http://www.bea.gov/international/bp_web/simple.cfm?anon=71&table_id=14)). Net private foreign sales of U.S. Treasury securities were $63.8 billion in the second quarter, a shift from net purchases of $3.5 billion in the first. Net private foreign sales of U.S. securities other than U.S. Treasury securities were $9.5 billion in the second quarter, up from $2.6 billion in the first. Net foreign sales of U.S. federally sponsored agency bonds were $23.3 billion in the second quarter, down from $32.5 billion in the first. Net foreign sales of U.S. corporate bonds were $13.9 billion, up from $4.3 billion. Net foreign purchases of U.S. stocks decreased to $27.7 billion from $34.2 billion. (Table 8a (http://www.bea.gov/international/bp_web/simple.cfm? anon=71&table_id=17)). Foreign direct investment in the United States was $47.7 billion in the second quarter, following investment of $28.5 billion in the first. Nearly all of the increase resulted from increases in equity investment. (Table 7a (http://www.bea.gov/international/bp_web/simple.cfm?anon=71&table_id=18&area_id=3)). U.S. liabilities to unaffiliated foreigners reported by U.S. nonbanking concerns increased $20.8 billion in the second quarter, following an increase of $42.0 billion in the first. Foreign official assets in the United States increased $94.6 billion in the second quarter, following an increase of $48.8 billion in the first. The increase was mostly due to net purchases of U.S. Treasury securities. Net shipments of U.S. currency to foreign countries were $14.0 billion in the second quarter, up from $12.6 billion in the first. The statistical discrepancy—net errors and omissions in recorded transactions—was $93.1 billion in the second quarter compared with -$36.4 billion in the first. In the second quarter, the U.S. dollar depreciated 1.7 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 The first-quarter 2011 international transactions are revised from previously published statistics. The current-account deficit was revised up to $119.6 billion from $119.3 billion. The goods deficit was revised down to $182.2 billion from $182.5 billion; the services surplus was revised up to $42.3 billion from $41.7 billion; the income surplus was revised down to $52.7 billion from $54.8 billion; and net outflows of unilateral current transfers were revised down to $32.3 billion from $33.2 billion. Net financial inflows were revised to $156.1 billion from $181.9 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 at www.bea.gov. By visiting the site, you can also subscribe to receive free e-mail summaries of BEA releases and announcements. September 15, 2011 Table 1. U.S. International Transactions [Millions of dollars, quarters seasonally adjusted] 2010 2011 Change: (Credits +, debits -) 2010 2011:I- I II III IV I r II p 2011:II Current account 1 Exports of goods and services and income receipts............................................ 2,500,817 595,359 616,163 632,309 656,986 687,815 716,683 28,868 2 Exports of goods and services............................................................. 1,837,577 436,501 451,134 465,194 484,747 507,557 523,742 16,185 3 Goods, balance of payments basis...................................................... 1,288,699 304,572 315,954 325,514 342,659 361,544 373,085 11,541 4 Services.............................................................................. 548,878 131,929 135,180 139,680 142,088 146,013 150,657 4,644 5 Transfers under U.S. military agency sales contracts.............................. 17,483 4,312 4,498 4,532 4,141 4,231 4,501 270 6 Travel............................................................................ 103,505 25,212 25,395 26,203 26,695 27,301 28,797 1,496 7 Passenger fares................................................................... 30,931 7,135 7,725 8,076 7,994 8,362 9,122 760 8 Other transportation.............................................................. 39,936 9,719 9,998 10,098 10,121 10,464 10,655 191 9 Royalties and license fees........................................................ 105,583 25,615 26,227 26,720 27,021 28,012 28,591 579 10 Other private services............................................................ 250,320 59,568 61,097 63,805 65,851 67,329 68,725 1,396 11 U.S. government miscellaneous services............................................ 1,121 369 239 247 266 314 267 -47 12 Income receipts........................................................................... 663,240 158,857 165,030 167,115 172,239 180,258 192,941 12,683 13 Income receipts on U.S.-owned assets abroad........................................... 657,963 157,540 163,708 165,793 170,921 178,898 191,583 12,685 14 Direct investment receipts........................................................ 432,000 102,518 107,629 109,653 112,199 118,231 127,481 9,250 15 Other private receipts............................................................ 224,469 54,584 55,729 55,785 58,371 60,231 63,590 3,359 16 U.S. government receipts.......................................................... 1,494 438 350 355 351 436 512 76 17 Compensation of employees............................................................. 5,278 1,317 1,321 1,322 1,317 1,360 1,358 -2 18 Imports of goods and services and income payments............................................ -2,835,620 -678,617 -703,516 -717,682 -735,804 -775,129 -800,529 -25,400 19 Imports of goods and services............................................................. -2,337,604 -556,144 -581,657 -596,307 -603,496 -647,529 -668,736 -21,207 20 Goods, balance of payments basis...................................................... -1,934,555 -457,404 -481,912 -493,336 -501,904 -543,767 -563,524 -19,757 21 Services.............................................................................. -403,048 -98,740 -99,745 -102,971 -101,592 -103,763 -105,211 -1,448 22 Direct defense expenditures....................................................... -30,391 -7,721 -7,590 -7,609 -7,471 -7,570 -7,520 50 23 Travel............................................................................ -75,507 -19,085 -18,291 -19,077 -19,054 -19,280 -19,778 -498 24 Passenger fares................................................................... -27,279 -6,228 -6,770 -7,022 -7,259 -7,552 -7,701 -149 25 Other transportation.............................................................. -51,202 -11,919 -13,018 -13,600 -12,666 -13,451 -13,890 -439 26 Royalties and license fees........................................................ -33,450 -8,998 -7,916 -8,177 -8,359 -8,879 -9,011 -132 27 Other private services............................................................ -180,598 -43,702 -45,045 -46,265 -45,585 -45,949 -46,252 -303 28 U.S. government miscellaneous services............................................ -4,621 -1,087 -1,116 -1,221 -1,198 -1,081 -1,059 22 29 Income payments........................................................................... -498,016 -122,473 -121,859 -121,375 -132,309 -127,600 -131,793 -4,193 30 Income payments on foreign-owned assets in the United States.......................... -483,504 -118,856 -118,222 -117,727 -128,700 -124,012 -128,214 -4,202 31 Direct investment payments........................................................ -151,361 -35,980 -35,056 -35,465 -44,861 -39,249 -42,665 -3,416 32 Other private payments............................................................ -196,004 -48,916 -48,997 -48,098 -49,993 -51,014 -51,765 -751 33 U.S. government payments.......................................................... -136,139 -33,960 -34,169 -34,164 -33,846 -33,749 -33,784 -35 34 Compensation of employees............................................................. -14,512 -3,617 -3,637 -3,649 -3,609 -3,588 -3,580 8 35 Unilateral current transfers, net............................................................ -136,095 -35,034 -32,947 -34,754 -33,360 -32,277 -34,157 -1,880 36 U.S. government grants.................................................................... -44,717 -12,285 -10,005 -11,031 -11,396 -10,987 -13,010 -2,023 37 U.S. government pensions and other transfers.............................................. -10,365 -2,548 -2,590 -2,616 -2,611 -2,629 -2,658 -29 38 Private remittances and other transfers................................................... -81,013 -20,201 -20,352 -21,107 -19,353 -18,661 -18,489 172 September 15, 2011 Table 1. U.S. International Transactions (Continued) [Millions of dollars, quarters seasonally adjusted] 2010 2011 Change: (Credits +, debits -) 2010 2011:I- I II III IV I r II p 2011:II Capital account 39 Capital account transactions, net............................................................ -152 -3 -2 -146 -2 -29 -823 -794 Financial account 40 U.S.-owned assets abroad, excluding financial derivatives (increase/financial outflow (-))......................................................... -1,005,182 -313,010 -168,537 -286,834 -236,802 -334,359 22,947 357,306 41 U.S. official reserve assets.............................................................. -1,834 -773 -165 -1,096 200 -3,619 -6,267 -2,648 42 Gold.................................................................................. 0 0 0 0 0 0 0 0 43 Special drawing rights................................................................ -31 -7 -6 -8 -10 1,961 -159 -2,120 44 Reserve position in the International Monetary Fund................................... -1,293 -581 -77 -956 321 -6,428 -5,974 454 45 Foreign currencies.................................................................... -510 -185 -82 -132 -111 848 -134 -982 46 U.S. government assets, other than official reserve assets................................ 7,540 9,433 -2,441 788 -240 -547 -1,412 -865 47 U.S. credits and other long-term assets............................................... -4,976 -1,247 -1,835 -1,027 -867 -1,307 -2,322 -1,015 48 Repayments on U.S. credits and other long-term assets................................. 2,408 399 783 679 547 610 1,205 595 49 U.S. foreign currency holdings and U.S. short-term assets............................. 10,108 10,281 -1,389 1,136 80 150 -295 -445 50 U.S. private assets....................................................................... -1,010,888 -321,669 -165,931 -286,526 -236,762 -330,193 30,626 360,819 51 Direct investment..................................................................... -351,350 -110,148 -69,478 -78,734 -92,990 -89,205 -134,086 -44,881 52 Foreign securities.................................................................... -151,916 -47,028 -22,114 -39,336 -43,438 -58,171 -30,061 28,110 53 U.S. claims on unaffiliated foreigners reported by U.S. nonbanking concerns........... 7,421 10,932 4,382 -2,146 -5,747 -95,007 -918 94,089 54 U.S. claims reported by U.S. banks and securities brokers............................. -515,043 -175,425 -78,721 -166,310 -94,587 -87,810 195,691 283,501 55 Foreign-owned assets in the United States, excluding financial derivatives (increase/financial inflow (+)).......................................................... 1,245,736 329,340 186,636 463,115 266,646 487,194 2,769 -484,425 56 Foreign official assets in the United States.............................................. 349,754 89,751 66,736 135,477 57,790 48,764 94,565 45,801 57 U.S. government securities............................................................ 316,980 84,837 45,128 123,736 63,279 48,814 76,108 27,294 58 U.S. Treasury securities.......................................................... 397,797 97,364 31,751 188,994 79,688 33,510 79,314 45,804 59 Other............................................................................. -80,817 -12,527 13,377 -65,258 -16,409 15,304 -3,206 -18,510 60 Other U.S. government liabilities..................................................... 12,124 4,007 2,503 1,773 3,841 2,645 2,055 -590 61 U.S. liabilities reported by U.S. banks and securities brokers........................ -9,375 -16,005 3,888 10,019 -7,277 -3,073 15,016 18,089 62 Other foreign official assets......................................................... 30,025 16,912 15,217 -51 -2,053 378 1,386 1,008 63 Other foreign assets in the United States................................................. 895,982 239,589 119,900 327,638 208,856 438,430 -91,796 -530,226 64 Direct investment..................................................................... 236,226 52,085 33,930 79,655 70,557 28,493 47,719 19,226 65 U.S. Treasury securities.............................................................. 256,428 84,193 82,062 60,659 29,514 3,466 -63,810 -67,276 66 U.S. securities other than U.S. Treasury securities................................... 120,453 5,421 -15,475 82,076 48,431 -2,590 -9,463 -6,873 67 U.S. currency......................................................................... 28,319 2,265 2,100 10,514 13,440 12,576 13,989 1,413 68 U.S. liabilities to unaffiliated foreigners reported by U.S. nonbanking concerns...... 77,456 27,728 21,302 11,668 16,758 42,045 20,812 -21,233 69 U.S. liabilities reported by U.S. banks and securities brokers........................ 177,100 67,897 -4,019 83,066 30,156 354,440 -101,043 -455,483 70 Financial derivatives, net................................................................... 13,735 16,152 9,980 -11,893 -504 3,220 n.a. n.a. 71 Statistical discrepancy (sum of above items with sign reversed).............................. 216,761 85,813 92,223 -44,116 82,841 -36,436 /1/ 93,110 /2/ 129,546 Memoranda: 72 Balance on goods (lines 3 and 20)............................................................ -645,857 -152,832 -165,958 -167,822 -159,245 -182,222 -190,440 -8,218 73 Balance on services (lines 4 and 21)......................................................... 145,830 33,189 35,435 36,709 40,496 42,250 45,446 3,196 74 Balance on goods and services (lines 2 and 19)............................................... -500,027 -119,642 -130,523 -131,113 -118,749 -139,972 -144,994 -5,022 75 Balance on income (lines 12 and 29).......................................................... 165,224 36,384 43,170 45,740 39,930 52,658 61,148 8,490 76 Unilateral current transfers, net (line 35).................................................. -136,095 -35,034 -32,947 -34,754 -33,360 -32,277 -34,157 -1,880 77 Balance on current account (lines 1, 18, and 35 or lines 74, 75, and 76)..................... -470,898 -118,292 -120,300 -120,127 -112,179 -119,591 -118,003 1,588 78 Net financial flows (lines 40, 55, and 70)................................................... 254,289 32,482 28,079 164,388 29,340 156,055 /1/ 25,716 /2/-130,339 1 Calculated excluding financial derivatives, net (line 70). 2 The change shown here is calculated as the change from the prior period, not as the sum of changes in the above items. p Preliminary r Revised n.a. Not available NOTE: Details may not add to totals because of rounding. Source: U. S. Bureau of Economic Analysis