FOR WIRE TRANSMISSION: 8:30 A.M. EST, THURSDAY, December 16, 2010 Sarah P. Scott: (202) 606-9286 BEA 10-58 U.S. International Transactions: Third Quarter 2010 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 $127.2 billion (preliminary) in the third quarter of 2010, from $123.2 billion (revised) in the second quarter of 2010. The increase was the fifth consecutive quarterly increase since the deficit of $84.4 billion in the second quarter of 2009, which was the smallest deficit since the third quarter of 1999. The increase was largely accounted for by a reduction in the surplus on income and an increase in the deficit on goods. An increase in net unilateral current transfers also contributed; an increase in the surplus on services was partly offsetting. Goods and services The deficit on goods and services increased to $134.4 billion in the third quarter from $133.1 billion in the second. Goods The deficit on goods increased to $171.2 billion in the third quarter from $169.6 billion in the second. Goods exports increased to $323.1 billion from $316.2 billion. Most major end-use categories increased in the third quarter. Capital goods and foods, feeds, and beverages accounted for most of the increase. The increase in capital goods mainly reflected gains in machinery and equipment and in civilian aircraft. The increase in exports of foods, feeds, and beverages was mostly accounted for by gains in soybeans. Goods imports increased to $494.2 billion from $485.7 billion. Most major end-use categories increased; most of the increase was accounted for by consumer goods and capital goods. Consumer goods increased as a result of pickups in both durable and nondurable goods. The third-quarter gain within capital goods was widespread across commodities, led by a 24 percent jump in semiconductors. The gains in consumer and capital goods were partly offset by a decrease in industrial supplies and materials, mostly as a result of a decrease in petroleum imports. Services The surplus on services increased to $36.8 billion in the third quarter from $36.5 billion in the second. Services receipts increased to $136.8 billion from $133.7 billion. The largest increases were in travel and in other private services. Most of the other services categories also increased. Services payments increased to $100.0 billion from $97.2 billion. The largest increases were in travel, in other transportation, and in other private services. Most of the other services categories also increased. Income The surplus on income decreased to $41.1 billion in the third quarter from $43.0 billion in the second. Investment income Income receipts on U.S.-owned assets abroad increased to $164.7 billion from $163.1 billion. The largest increase was in direct investment receipts. Other private receipts (which consists of interest and dividends) and U.S. government receipts also increased. Income payments on foreign-owned assets in the United States increased to $121.6 billion from $118.0 billion. The increase was more than accounted for by direct investment payments. A decrease in other private payments (which consists of interest and dividends) was partly offsetting. Compensation of employees Receipts for compensation of U.S. workers abroad remained at $0.8 billion in the third quarter. Payments for compensation of foreign workers in the United States remained at $2.9 billion. Unilateral current transfers Net unilateral current transfers to foreigners were $33.9 billion in the third quarter, up from $33.2 billion in the second. The increase was more than accounted for by U.S. government grants. Capital Account Net capital account payments (outflows) remained close to zero for the third consecutive quarter. Financial Account Net financial inflows were $181.6 billion in the third quarter, up from $31.0 billion in the second. Growth in both U.S.-owned assets abroad and foreign- owned assets in the United States picked up considerably, however the pickup in foreign-owned assets in the United States was greater than that of U.S.-owned assets abroad. U.S.-owned assets abroad U.S.-owned assets abroad increased $324.5 billion in the third quarter, following an increase of $141.2 billion in the second. U.S. claims on foreigners reported by U.S. banks and securities brokers increased $195.7 billion in the third quarter, following an increase of $57.0 billion in the second. (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 $44.5 billion in the third quarter following net U.S. purchases of $20.3 billion in the second. Net U.S. purchases of foreign stocks slowed to $16.5 billion from $22.2 billion. Transactions in foreign bonds shifted to net U.S. purchases of $28.0 billion from small net U.S. sales of $1.8 billion. U.S. direct investment abroad was $83.1 billion in the third quarter, up from $72.5 billion in the second. The increase in direct investment was more than accounted for by a shift to outflows from inflows in net intercompany debt investment abroad and an increase in reinvested earnings. A shift to equity inflows was partly offsetting. U.S. claims on unaffiliated foreigners reported by U.S. nonbanking concerns increased $0.7 billion in the third quarter, following a decrease of $11.3 billion in the second. U.S. official reserve assets increased $1.1 billion in the third quarter, following an increase of $0.2 billion in the second. U.S. government assets other than official reserve assets decreased $0.6 billion in the third quarter, following an increase of $2.4 billion in the second. Foreign-owned assets in the United States Foreign-owned assets in the United States increased $506.1 billion in the third quarter, following an increase of $162.1 billion in the second. U.S. liabilities to foreigners reported by U.S. banks and securities brokers (other than foreign official assets) increased $107.1 billion in the third quarter, following a decrease of $6.7 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 in the United States.) Net private foreign purchases of U.S. Treasury securities were $65.0 billion in the third quarter, down from $101.3 billion in the second. Net private foreign transactions in U.S. securities other than U.S. Treasury securities shifted to net foreign purchases of $108.8 billion in the third quarter from net foreign sales of $5.6 billion in the second. Transactions in U.S. federally sponsored agency bonds were a record net purchases of $54.0 billion in the third quarter, up from net purchases of $8.1 billion in the second. Net foreign transactions in U.S. corporate bonds shifted to net purchases of $18.0 billion from net foreign sales of $18.1 billion. Net foreign purchases of U.S. stocks were $36.8 billion, up from $4.4 billion. Foreign direct investment in the United States was $70.5 billion in the third quarter, following investment of $18.0 billion in the second. The increase was mostly accounted for by growth in equity investment and a shift to net inflows from net outflows in net intercompany debt investment in the United States. U.S. liabilities to unaffiliated foreigners reported by U.S. nonbanking concerns increased $2.7 billion in the third quarter, following an increase of $9.4 billion in the second. Foreign official assets in the United States increased $141.6 billion in the third quarter, following an increase of $43.6 billion in the second. Net shipments of U.S. currency to foreign countries were $10.5 billion in the third quarter, up from $2.1 billion in the second. The statistical discrepancy—errors and omissions in recorded transactions—was -$54.4 billion in the third quarter compared with $92.2 billion in the second. In the third quarter, the U.S. dollar depreciated 2.2 percent on a trade- weighted quarterly average basis against a group of 7 major currencies. Revisions The second-quarter 2010 international transactions are revised from previously published statistics. The current-account deficit was revised down slightly to $123.2 billion from $123.3 billion. The goods deficit was nearly unrevised at $169.6 billion; the services surplus was revised to $36.5 billion from $38.0 billion; the income surplus was revised to $43.0 billion from $41.2 billion; and unilateral current transfers were revised to net outflows of $33.2 billion from $32.9 billion. Net financial inflows were revised to $31.0 billion from $36.6 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) * * * 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, 2010 Table 1. U.S. International Transactions [Millions of dollars, quarters seasonally adjusted] 2009 2010 Change: (Credits +, debits -) 2009 2010 I II III IV I II r III p II-III Current account 1 Exports of goods and services and income receipts....................................... 2,159,000 521,735 520,110 540,729 576,426 600,182 613,730 625,346 11,616 2 Exports of goods and services........................................................ 1,570,797 378,378 377,829 394,145 420,444 438,914 449,859 459,818 9,959 3 Goods, balance of payments basis................................................. 1,068,499 255,044 254,021 268,858 290,576 305,640 316,163 323,061 6,898 4 Services......................................................................... 502,298 123,334 123,808 125,287 129,868 133,274 133,696 136,758 3,062 5 Transfers under U.S. military agency sales contracts......................... 17,096 3,381 4,561 5,445 3,709 4,242 4,464 4,815 351 6 Travel....................................................................... 93,917 23,631 23,006 23,311 23,969 25,006 25,199 26,273 1,074 7 Passenger fares.............................................................. 26,424 7,035 6,534 6,498 6,356 7,167 7,806 8,223 417 8 Other transportation......................................................... 35,406 8,652 8,549 8,834 9,371 9,691 9,947 9,905 -42 9 Royalties and license fees................................................... 89,791 21,502 22,363 21,396 24,530 24,138 24,062 24,390 328 10 Other private services....................................................... 238,332 58,831 58,487 59,458 61,555 62,576 61,893 62,822 929 11 U.S. government miscellaneous services....................................... 1,333 302 309 345 377 454 324 331 7 12 Income receipts...................................................................... 588,203 143,356 142,281 146,584 155,982 161,268 163,871 165,528 1,657 13 Income receipts on U.S.-owned assets abroad...................................... 585,256 142,618 141,543 145,855 155,239 160,509 163,094 164,741 1,647 14 Direct investment receipts................................................... 346,073 75,363 82,354 89,626 98,730 104,130 105,114 106,592 1,478 15 Other private receipts....................................................... 234,458 64,788 58,080 55,506 56,084 55,981 57,655 57,815 160 16 U.S. government receipts..................................................... 4,724 2,467 1,109 723 425 398 325 334 9 17 Compensation of employees........................................................ 2,947 738 738 728 743 759 777 787 10 18 Imports of goods and services and income payments....................................... -2,412,489 -587,564 -574,265 -604,594 -646,066 -674,473 -703,794 -718,687 -14,893 19 Imports of goods and services........................................................ -1,945,705 -468,817 -458,270 -493,467 -525,152 -553,365 -582,937 -594,214 -11,277 20 Goods, balance of payments basis................................................. -1,575,443 -376,241 -367,528 -400,977 -430,698 -456,961 -485,734 -494,218 -8,484 21 Services......................................................................... -370,262 -92,576 -90,742 -92,490 -94,454 -96,404 -97,203 -99,996 -2,793 22 Direct defense expenditures.................................................. -30,474 -7,395 -7,662 -7,728 -7,689 -7,721 -7,590 -7,580 10 23 Travel....................................................................... -73,230 -18,702 -17,721 -18,459 -18,348 -18,651 -18,152 -19,167 -1,015 24 Passenger fares.............................................................. -25,980 -6,784 -6,163 -6,455 -6,578 -6,638 -6,981 -7,228 -247 25 Other transportation......................................................... -41,586 -11,295 -10,141 -9,880 -10,269 -11,287 -12,344 -13,028 -684 26 Royalties and license fees................................................... -25,230 -5,988 -6,442 -6,137 -6,663 -7,662 -7,087 -7,191 -104 27 Other private services....................................................... -168,892 -41,274 -41,461 -42,611 -43,546 -43,250 -43,825 -44,480 -655 28 U.S. government miscellaneous services....................................... -4,871 -1,138 -1,152 -1,220 -1,360 -1,194 -1,224 -1,323 -99 29 Income payments...................................................................... -466,783 -118,747 -115,995 -111,127 -120,914 -121,108 -120,857 -124,473 -3,616 30 Income payments on foreign-owned assets in the United States..................... -456,027 -116,032 -113,323 -108,460 -118,212 -118,304 -117,992 -121,589 -3,597 31 Direct investment payments................................................... -94,010 -13,663 -22,810 -23,348 -34,189 -35,143 -33,461 -37,601 -4,140 32 Other private payments....................................................... -218,020 -63,460 -54,146 -50,473 -49,941 -48,426 -48,902 -48,140 762 33 U.S. government payments..................................................... -143,997 -38,909 -36,367 -34,639 -34,082 -34,735 -35,629 -35,848 -219 34 Compensation of employees........................................................ -10,757 -2,715 -2,673 -2,667 -2,702 -2,804 -2,865 -2,884 -19 35 Unilateral current transfers, net....................................................... -124,943 -29,747 -30,292 -33,638 -31,268 -34,867 -33,151 -33,886 -735 36 U.S. government grants............................................................... -41,638 -8,641 -10,969 -13,067 -8,962 -12,311 -10,005 -10,813 -808 37 U.S. government pensions and other transfers......................................... -8,874 -2,180 -2,222 -2,233 -2,241 -2,548 -2,590 -2,597 -7 38 Private remittances and other transfers.............................................. -74,431 -18,927 -17,101 -18,338 -20,065 -20,008 -20,555 -20,476 79 December 16, 2010 Table 1. U.S. International Transactions (Continued) [Millions of dollars, quarters seasonally adjusted] 2009 2010 Change: (Credits +, debits -) 2009 2010 I II III IV I II r III p II-III Capital account 39 Capital account transactions, net....................................................... -140 -20 -29 -36 -56 -3 -2 -8 -6 Financial account 40 U.S.-owned assets abroad, excluding financial derivatives (increase/financial outflow (-)).................................................... -140,465 112,726 31,734 -276,241 -8,685 -301,389 -141,177 -324,506 -183,329 41 U.S. official reserve assets......................................................... -52,256 -982 -3,632 -49,021 1,379 -773 -165 -1,096 -931 42 Gold............................................................................. 0 0 0 0 0 0 0 0 0 43 Special drawing rights........................................................... -48,230 -15 -8 -47,720 -487 -7 -6 -8 -2 44 Reserve position in the International Monetary Fund.............................. -3,357 -754 -3,485 -1,098 1,980 -581 -77 -956 -879 45 Foreign currencies............................................................... -669 -213 -139 -203 -114 -185 -82 -132 -50 46 U.S. government assets, other than official reserve assets........................... 541,342 244,102 193,750 57,736 45,754 9,433 -2,441 571 3,012 47 U.S. credits and other long-term assets.......................................... -4,069 -240 -1,947 -616 -1,266 -1,247 -1,835 -977 858 48 Repayments on U.S. credits and other long-term assets............................ 2,133 484 432 534 683 399 783 404 -379 49 U.S. foreign currency holdings and U.S. short-term assets........................ 543,278 243,858 195,265 57,818 46,337 10,281 -1,389 1,144 2,533 50 U.S. private assets.................................................................. -629,552 -130,394 -158,384 -284,956 -55,817 -310,048 -138,572 -323,981 -185,409 51 Direct investment................................................................ -268,680 -45,145 -62,066 -78,313 -83,155 -102,940 -72,536 -83,117 -10,581 52 Foreign securities............................................................... -208,213 -29,176 -86,725 -46,823 -45,489 -46,147 -20,329 -44,460 -24,131 53 U.S. claims on unaffiliated foreigners reported by U.S. nonbanking concerns...... 124,428 2,717 22,161 83,302 16,248 10,821 11,306 -734 -12,040 54 U.S. claims reported by U.S. banks and securities brokers........................ -277,087 -58,790 -31,754 -243,122 56,579 -171,782 -57,013 -195,670 -138,657 55 Foreign-owned assets in the United States, excluding financial derivatives (increase/financial inflow (+))..................................................... 305,736 -111,916 -28,348 342,385 103,615 320,217 162,096 506,126 344,030 56 Foreign official assets in the United States......................................... 450,030 107,912 128,667 96,616 116,835 72,507 43,568 141,614 98,046 57 U.S. government securities....................................................... 441,056 145,512 120,776 73,293 101,475 83,384 37,848 130,030 92,182 58 U.S. Treasury securities..................................................... 561,125 163,809 149,213 123,675 124,428 89,654 18,229 197,988 179,759 59 Other........................................................................ -120,069 -18,297 -28,437 -50,382 -22,953 -6,270 19,619 -67,958 -87,577 60 Other U.S. government liabilities................................................ 57,971 2,534 685 53,455 1,297 4,060 2,484 1,518 -966 61 U.S. liabilities reported by U.S. banks and securities brokers................... -70,851 -44,928 -4,900 -33,735 12,712 -15,968 3,886 10,022 6,136 62 Other foreign official assets.................................................... 21,854 4,794 12,106 3,603 1,351 1,031 -650 44 694 63 Other foreign assets in the United States............................................ -144,294 -219,828 -157,015 245,769 -13,220 247,710 118,528 364,512 245,984 64 Direct investment................................................................ 134,707 5,866 31,524 55,803 41,514 51,568 18,037 70,482 52,445 65 U.S. Treasury securities......................................................... 22,781 46,084 -29,321 -9,203 15,221 103,092 101,320 64,985 -36,335 66 U.S. securities other than U.S. Treasury securities.............................. 59 -67,781 -221 47,708 20,353 6,077 -5,588 108,785 114,373 67 U.S. currency.................................................................... 12,632 11,816 -1,935 4,179 -1,428 2,265 2,100 10,503 8,403 68 U.S. liabilities to unaffiliated foreigners reported by U.S. nonbanking concerns. -1,460 -11,614 26,564 8,572 -24,982 20,877 9,406 2,665 -6,741 69 U.S. liabilities reported by U.S. banks and securities brokers................... -313,013 -204,199 -183,626 138,710 -63,898 63,831 -6,747 107,092 113,839 70 Financial derivatives, net.............................................................. 50,804 7,221 11,275 11,496 20,812 15,838 10,048 n.a. n.a. 71 Statistical discrepancy (sum of above items with sign reversed)......................... 162,497 87,565 69,815 19,899 -14,779 74,494 92,249 /1/-54,385 /2/-146,634 Memoranda: 72 Balance on goods (lines 3 and 20)....................................................... -506,944 -121,197 -113,507 -132,119 -140,121 -151,321 -169,571 -171,157 -1,586 73 Balance on services (lines 4 and 21).................................................... 132,036 30,758 33,066 32,797 35,414 36,870 36,493 36,761 268 74 Balance on goods and services (lines 2 and 19).......................................... -374,908 -90,439 -80,441 -99,322 -104,707 -114,451 -133,078 -134,396 -1,318 75 Balance on income (lines 12 and 29)..................................................... 121,419 24,609 26,286 35,457 35,068 40,160 43,014 41,055 -1,959 76 Unilateral current transfers, net (line 35)............................................. -124,943 -29,747 -30,292 -33,638 -31,268 -34,867 -33,151 -33,886 -735 77 Balance on current account (lines 1, 18, and 35 or lines 74, 75, and 76)................ -378,432 -95,577 -84,447 -97,503 -100,907 -109,158 -123,214 -127,227 -4,013 78 Net financial flows (lines 40, 55, and 70).............................................. 216,075 8,031 14,661 77,640 115,742 34,666 30,967 /1/181,620 /2/150,653 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