FOR WIRE TRANSMISSION: 8:30 A.M. EST, WEDNESDAY, December 16, 2009 Douglas B. Weinberg: (202) 606-9590 BEA 09-54 U.S. International Transactions: Third Quarter 2009 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 $108.0 billion (preliminary) in the third quarter of 2009 from $98.0 billion (revised) in the second quarter. The increase was more than accounted for by an increase in the deficit on goods. A small increase in net unilateral current transfers to foreigners also contributed to the higher current-account deficit. Increases in the surpluses on income and on services were partly offsetting. Goods and services The deficit on goods and services increased to $97.4 billion in the third quarter from $81.2 billion in the second. Goods The deficit on goods increased to $132.1 billion in the third quarter from $115.5 billion in the second. Goods exports increased to $263.9 billion from $246.1 billion. The increase was largely accounted for by increases in industrial supplies and materials and in automotive products. Capital goods and consumer goods also increased. Goods imports increased to $396.1 billion from $361.6 billion. The increase was largely accounted for by increases in industrial supplies and materials, mostly in petroleum and products, and in automotive products. Capital goods and consumer goods also increased. Services The surplus on services increased to $34.8 billion in the third quarter from $34.2 billion in the second. Services exports increased to $128.6 billion from $125.3 billion. The increase was mostly accounted for by increases in travel, in “other” private services (such as business, professional, and technical services, insurance services, and financial services), in “other” transportation (such as freight and port services), and in royalties and license fees. Services imports increased to $93.9 billion from $91.0 billion. The increase was mostly accounted for by increases in “other” private services, in travel, in “other” transportation, and in direct defense expenditures. Income The surplus on income increased to $23.7 billion in the third quarter from $16.7 billion in the second. Investment income Income receipts on U.S.-owned assets abroad increased to $139.7 billion from $134.3 billion. An increase in direct investment receipts was partly offset by decreases in “other” private receipts (which consists of interest and dividends) and in U.S. government receipts. Income payments on foreign-owned assets in the United States decreased to $114.2 billion from $115.9 billion. Decreases in “other” private payments (which consists of interest and dividends) and in U.S. government payments were largely offset by an increase 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 $2.5 billion. Unilateral current transfers Net unilateral current transfers to foreigners were $34.4 billion in the third quarter, up from $33.4 billion in the second. The increase was more than accounted for by an increase in U.S. government grants. Capital Account Net capital account payments (outflows) were virtually unchanged at $0.7 billion in the third quarter. Financial Account Net financial inflows were $38.3 billion in the third quarter, down from $63.3 billion in the second. The slowdown resulted from a shift to an increase from a decrease in U.S.-owned assets abroad (a shift to outflows from inflows) that was mostly offset by a larger increase in foreign-owned assets in the United States in the third quarter than in the second quarter (larger inflows). U.S.-owned assets abroad U.S.-owned assets abroad increased $294.1 billion in the third quarter, following a decrease of $37.4 billion in the second. U.S. claims on foreigners reported by U.S. banks and securities brokers increased $240.1 billion in the third quarter, following an increase of $27.2 billion in the second. (Examples of these claims are U.S. residents’ deposits at banks abroad and loans by U.S. banks and securities brokers to foreigners.) Net U.S. purchases of foreign securities were $47.8 billion in the third quarter, down from $92.6 billion in the second. Net U.S. purchases of foreign stocks were $26.8 billion, down from $37.7 billion. Net U.S. purchases of foreign bonds were $21.0 billion, down from $54.9 billion. U.S. direct investment abroad increased $62.7 billion in the third quarter, following an increase of $47.4 billion in the second. Shifts to increases from decreases in net equity capital investment and in net intercompany debt investment abroad were partly offset by a small reduction in reinvested earnings. U.S. official reserve assets increased $49.0 billion in the third quarter, following an increase of $3.6 billion in the second. The pickup resulted from the allocation of $47.6 billion in special drawing rights (SDRs) to the United States as part of two new allocations of SDRs by the International Monetary Fund to its member countries. U.S. government assets other than official reserve assets decreased $57.9 billion in the third quarter, following a decrease of $193.8 billion in the second. The decreases in each of the last three quarters resulted from the reversal of swaps initiated under temporary reciprocal currency arrangements between the U.S. Federal Reserve System and foreign central banks. Foreign-owned assets in the United States Foreign-owned assets in the United States increased $332.4 billion in the third quarter, following an increase of $14.6 billion in the second. U.S. liabilities to foreigners reported by U.S. banks and securities brokers increased $127.0 billion in the third quarter, following a decrease of $178.9 billion in the second. (Examples of these liabilities are deposits of foreign residents at banks in the United States and loans by banks abroad to banks and securities brokers in the United States.) Net sales of U.S. Treasury securities by private foreigners were $9.2 billion in the third quarter, down from $22.8 billion in the second. Net purchases of U.S. securities other than U.S. Treasury securities by private foreigners were $24.7 billion in the third quarter, up from $13.9 billion in the second. Net foreign purchases of U.S. stocks were $48.6 billion, up from $35.6 billion. Net foreign purchases of U.S. federally sponsored agency bonds were $6.6 billion, up from $0.3 billion. Net foreign sales of U.S. corporate bonds were $30.4 billion, up from $22.0 billion. Foreign direct investment in the United States increased $40.0 billion in the third quarter, following an increase of $37.0 billion in the second. The pickup was more than accounted for by larger increases in reinvested earnings and, to a much lesser extent, in net equity capital investment in the United States. In contrast, net intercompany debt investment in the United States slowed. Foreign official assets in the United States increased $123.6 billion in the third quarter, following an increase of $124.3 billion in the second. The third-quarter increase includes, as part of “other” U.S. government liabilities, a $47.6 billion increase associated with the allocation of SDRs to the United States. Transactions in U.S. currency shifted to net shipments to foreign countries of $4.2 billion in the third quarter from net shipments to the United States of $1.9 billion in the second. The statistical discrepancy—errors and omissions in recorded transactions—was $70.4 billion in the third quarter, compared with $35.4 billion in the second. In the third quarter, the U.S. dollar depreciated 5 percent on a trade-weighted quarterly average basis against a group of 7 major currencies. Revisions in Selected Historical Statistics In a departure from BEA’s normal schedule for revisions, selected historical statistics for the international transactions accounts released today are revised starting with the first quarter of 1970. The revisions result from a change in the way that BEA records allocations of special drawing rights (SDRs) to the United States and are prompted by the need to record special SDR allocations made by the International Monetary Fund (IMF) in the third quarter to help combat the global financial crisis. (SDRs are international reserve assets created by the IMF and allocated to participating member countries.) Consistent with new international standards, allocations of SDRs to the United States are now recorded as transactions in the financial account. Such allocations were made in the first quarters of 1970, 1971, 1972, 1979, 1980, and 1981 and in the third quarter of 2009. Additional information is available in an FAQ on BEA’s Web site and will also be available in the January Survey of Current Business article on U.S. international transactions. Revisions The second-quarter international transactions are revised from previously published statistics. The current-account deficit was revised to $98.0 billion from $98.8 billion. The goods deficit was unrevised at $115.5 billion; the services surplus was revised to $34.2 billion from $32.5 billion; the income surplus was revised to $16.7 billion from $16.4 billion; and unilateral current transfers were revised to net outflows of $33.4 billion from $32.2 billion. Net financial inflows were revised to $63.3 billion from $58.3 billion. * * * Release dates in 2010: Fourth quarter and year 2009...................March 18, 2010 (Thursday) First quarter 2010..............................June 17, 2010 (Thursday) Second quarter 2010........................September 16, 2010 (Thursday) Third quarter 2010..........................December 16, 2010 (Thursday) * * * Summary BEA statistics are available on recorded messages at the time of public release at the following telephone numbers: (202) 606-5306 Gross domestic product -5303 Personal income and outlays 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. December 16, 2009 Table 1. U.S. International Transactions [Millions of dollars, quarters seasonally adjusted] 2008 2009 Change: (Credits +, debits -) 2008 2009 I II III IV I II r III p II-III Current account 1 Exports of goods and services and income receipts................................... 2,591,233 654,217 671,886 673,383 591,747 507,553 506,482 532,937 26,455 2 Exports of goods and services.................................................... 1,826,596 451,290 473,090 478,064 424,151 372,201 371,409 392,534 21,125 3 Goods, balance of payments basis............................................. 1,276,994 315,637 332,876 337,912 290,569 249,374 246,134 263,911 17,777 4 Services..................................................................... 549,602 135,653 140,214 140,152 133,583 122,827 125,274 128,622 3,348 5 Transfers under U.S. military agency sales contracts..................... 22,571 6,226 5,931 5,120 5,295 5,437 6,976 7,142 166 6 Travel................................................................... 110,090 27,072 28,005 28,835 26,178 23,491 22,812 23,886 1,074 7 Passenger fares.......................................................... 31,623 7,522 7,950 8,254 7,896 7,146 6,659 6,607 -52 8 Other transportation..................................................... 58,945 14,541 15,601 15,621 13,182 10,779 10,639 11,304 665 9 Royalties and license fees............................................... 91,599 22,633 23,212 23,069 22,685 19,997 20,763 21,165 402 10 Other private services................................................... 233,529 57,359 59,209 58,940 58,021 55,665 57,106 58,163 1,057 11 U.S. government miscellaneous services................................... 1,245 299 307 313 326 312 319 355 36 12 Income receipts.................................................................. 764,637 202,927 198,796 195,319 167,596 135,352 135,074 140,403 5,329 13 Income receipts on U.S.-owned assets abroad.................................. 761,593 202,163 198,028 194,554 166,847 134,611 134,336 139,672 5,336 14 Direct investment receipts............................................... 370,747 98,426 100,538 96,047 75,736 63,168 71,566 78,978 7,412 15 Other private receipts................................................... 385,940 103,024 96,756 97,196 88,964 68,995 61,673 60,010 -1,663 16 U.S. government receipts................................................. 4,906 713 735 1,311 2,147 2,448 1,097 684 -413 17 Compensation of employees.................................................... 3,044 764 767 765 749 741 738 731 -7 18 Imports of goods and services and income payments................................... -3,168,938 -800,185 -828,458 -825,200 -715,096 -581,660 -571,053 -606,606 -35,553 19 Imports of goods and services.................................................... -2,522,532 -633,943 -655,937 -664,006 -568,646 -464,609 -452,649 -489,912 -37,263 20 Goods, balance of payments basis............................................. -2,117,245 -534,482 -554,372 -559,002 -469,389 -373,411 -361,621 -396,050 -34,429 21 Services..................................................................... -405,287 -99,461 -101,565 -105,004 -99,257 -91,199 -91,028 -93,862 -2,834 22 Direct defense expenditures.............................................. -36,452 -8,769 -8,986 -9,784 -8,913 -8,454 -8,831 -9,186 -355 23 Travel................................................................... -79,743 -20,235 -20,109 -19,848 -19,551 -18,504 -17,457 -18,370 -913 24 Passenger fares.......................................................... -32,597 -7,868 -8,029 -8,343 -8,357 -6,979 -6,122 -6,094 28 25 Other transportation..................................................... -72,143 -17,956 -18,496 -18,924 -16,767 -13,948 -13,022 -13,394 -372 26 Royalties and license fees............................................... -26,616 -6,427 -6,537 -7,644 -6,007 -5,687 -6,131 -6,292 -161 27 Other private services................................................... -153,267 -37,122 -38,315 -39,331 -38,498 -36,521 -38,279 -39,303 -1,024 28 U.S. government miscellaneous services................................... -4,469 -1,083 -1,092 -1,130 -1,164 -1,105 -1,186 -1,223 -37 29 Income payments.................................................................. -646,406 -166,241 -172,521 -161,194 -146,450 -117,051 -118,404 -116,694 1,710 30 Income payments on foreign-owned assets in the United States................. -636,043 -163,652 -169,951 -158,618 -143,823 -114,501 -115,913 -114,206 1,707 31 Direct investment payments............................................... -120,862 -27,269 -40,071 -29,050 -24,473 -11,970 -23,836 -27,589 -3,753 32 Other private payments................................................... -349,871 -94,416 -87,061 -88,504 -79,890 -66,038 -58,782 -55,186 3,596 33 U.S. government payments................................................. -165,310 -41,967 -42,819 -41,064 -39,460 -36,493 -33,295 -31,431 1,864 34 Compensation of employees.................................................... -10,364 -2,590 -2,571 -2,576 -2,627 -2,550 -2,491 -2,488 3 35 Unilateral current transfers, net................................................... -128,363 -33,330 -31,147 -32,361 -31,527 -30,343 -33,410 -34,365 -955 36 U.S. government grants........................................................... -36,003 -10,335 -7,893 -8,568 -9,207 -8,342 -10,841 -11,917 -1,076 37 U.S. government pensions and other transfers..................................... -8,390 -2,082 -2,097 -2,100 -2,113 -2,300 -2,342 -2,348 -6 38 Private remittances and other transfers.......................................... -83,970 -20,913 -21,157 -21,693 -20,207 -19,701 -20,227 -20,100 127 December 16, 2009 Table 1. U.S. International Transactions (Continued) [Millions of dollars, quarters seasonally adjusted] 2008 2009 Change: (Credits +, debits -) 2008 2009 I II III IV I II r III p II-III Capital account 39 Capital account transactions, net................................................... 953 -637 -682 2,967 -695 -710 -719 -686 33 Financial account 40 U.S.-owned assets abroad, excluding financial derivatives (increase/financial outflow (-)).................................................. -106 -251,501 107,343 29,322 114,730 94,734 37,398 -294,102 -331,500 41 U.S. official reserve assets..................................................... -4,848 -276 -1,267 -179 -3,126 -982 -3,632 -49,021 -45,389 42 Gold......................................................................... 0 0 0 0 0 0 0 0 0 43 Special drawing rights....................................................... -106 -29 -22 -30 -25 -15 -8 -47,720 -47,712 44 Reserve position in the International Monetary Fund.......................... -3,473 112 -955 256 -2,886 -754 -3,485 -1,098 2,387 45 Foreign currencies........................................................... -1,269 -359 -290 -405 -215 -213 -139 -203 -64 46 U.S. government assets, other than official reserve assets....................... -529,615 3,268 -41,592 -225,997 -265,293 244,102 193,750 57,928 -135,822 47 U.S. credits and other long-term assets...................................... -2,202 -179 -1,106 -475 -442 -240 -1,947 -397 1,550 48 Repayments on U.S. credits and other long-term assets........................ 2,354 490 497 695 672 484 432 476 44 49 U.S. foreign currency holdings and U.S. short-term assets.................... -529,766 2,957 -40,983 -226,217 -265,523 243,858 195,265 57,849 -137,416 50 U.S. private assets.............................................................. 534,357 -254,493 150,202 255,498 383,150 -148,387 -152,720 -303,009 -150,289 51 Direct investment............................................................ -332,012 -89,792 -103,619 -54,115 -84,486 -40,262 -47,442 -62,742 -15,300 52 Foreign securities........................................................... 60,761 -47,870 -40,566 79,182 70,015 -36,201 -92,589 -47,847 44,742 53 U.S. claims on unaffiliated foreigners reported by U.S. nonbanking concerns.. 372,229 116,232 64,906 87,352 103,739 17,477 14,519 47,656 33,137 54 U.S. claims reported by U.S. banks and securities brokers.................... 433,379 -233,063 229,481 143,079 293,882 -89,401 -27,208 -240,076 -212,868 55 Foreign-owned assets in the United States, excluding financial derivatives (increase/financial inflow (+)).................................................. 534,071 426,058 2,003 117,897 -11,888 -67,757 14,614 332,407 317,793 56 Foreign official assets in the United States..................................... 487,021 208,646 178,826 115,573 -16,024 70,892 124,299 123,584 -715 57 U.S. government securities................................................... 543,498 185,239 169,365 105,920 82,974 118,565 120,661 94,135 -26,526 58 U.S. Treasury securities................................................. 477,652 106,005 76,220 116,479 178,948 118,309 123,713 123,763 50 59 Other.................................................................... 65,846 79,234 93,145 -10,559 -95,974 256 -3,052 -29,628 -26,576 60 Other U.S. government liabilities............................................ 8,626 1,645 2,439 1,642 2,900 2,720 1,228 53,313 52,085 61 U.S. liabilities reported by U.S. banks and securities brokers............... -153,443 -24,173 -29,697 9,797 -109,370 -51,891 -732 -27,483 -26,751 62 Other foreign official assets................................................ 88,340 45,935 36,719 -1,786 7,472 1,498 3,142 3,619 477 63 Other foreign assets in the United States........................................ 47,050 217,412 -176,823 2,324 4,136 -138,649 -109,685 208,823 318,508 64 Direct investment............................................................ 319,737 59,473 100,706 62,755 96,802 23,851 36,975 40,023 3,048 65 U.S. Treasury securities..................................................... 196,619 16,127 18,947 80,049 81,496 53,716 -22,755 -9,156 13,599 66 U.S. securities other than U.S. Treasury securities.......................... -126,737 -15,179 19,983 -102,512 -29,029 -55,992 13,917 24,720 10,803 67 U.S. currency................................................................ 29,187 -6,750 230 5,845 29,862 11,816 -1,935 4,179 6,114 68 U.S. liabilities to unaffiliated foreigners reported by U.S. nonbanking concerns...................................................... -45,167 73,211 -54,996 76,442 -139,824 -8,270 43,003 22,079 -20,924 69 U.S. liabilities reported by U.S. banks and securities brokers............... -326,589 90,530 -261,693 -120,255 -35,171 -163,770 -178,890 126,978 305,868 70 Financial derivatives, net.......................................................... -28,905 -7,966 -2,355 -4,075 -14,509 8,407 11,265 n.a. n.a. 71 Statistical discrepancy (sum of above items with sign reversed)..................... 200,055 13,344 81,410 38,067 67,236 69,777 35,422 70,416 /1/ 34,994 Memoranda: 72 Balance on goods (lines 3 and 20)................................................... -840,252 -218,846 -221,496 -221,090 -178,820 -124,036 -115,487 -132,138 -16,651 73 Balance on services (lines 4 and 21)................................................ 144,316 36,192 38,649 35,148 34,326 31,628 34,247 34,760 513 74 Balance on goods and services (lines 2 and 19)...................................... -695,936 -182,653 -182,847 -185,942 -144,495 -92,408 -81,240 -97,378 -16,138 75 Balance on income (lines 12 and 29)................................................. 118,231 36,686 26,274 34,125 21,146 18,301 16,670 23,709 7,039 76 Unilateral current transfers, net (line 35)......................................... -128,363 -33,330 -31,147 -32,361 -31,527 -30,343 -33,410 -34,365 -955 77 Balance on current account (lines 1, 18, and 35 or lines 74, 75, and 76)............ -706,068 -179,298 -187,719 -184,178 -154,875 -104,450 -97,980 -108,034 -10,054 1 The statistical discrepancy in this column cannot be calculated as the "sum of above items with sign reversed" because financial derivatives, net (line 70) are not available. 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