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FOR WIRE TRANSMISSION: 10:00 A.M. EST, THURSDAY, DECEMBER 14, 2000
BEA 00-36

U.S. International Transactions Third Quarter 2000

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Douglas B. Weinberg:     (202) 606-9590                                               BEA 00-36
Recorded Message:              606-5362
                     U.S. International Transactions: Third Quarter 2000
                                       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 $113.8 billion in the third quarter
of 2000 from $105.0 billion (revised) in the second, according to preliminary estimates of the
Bureau of Economic Analysis.  The deficit on goods and services, the deficit on income, and net
unilateral current transfers all increased.
Goods and services
    The deficit on goods and services increased to $96.5 billion in the third quarter from
$88.6 billion in the second.
  Goods
    The deficit on goods increased to $115.4 billion in the third quarter from $110.2
billion in the second.
    Goods exports increased to $200.4 billion from $191.8 billion.  Both agricultural and
nonagricultural exports increased.  Within nonagricultural exports, capital goods and industrial
supplies and materials accounted for 90 percent of the increase.
    Goods imports increased to $315.8 billion from $302.0 billion.  Both petroleum and
nonpetroleum imports increased.  The increase in petroleum imports was attributable to a rise
in petroleum prices; the volume of petroleum imports decreased.  The largest increases in
nonpetroleum imports were in capital goods, in nonpetroleum industrial supplies and materials,
and in automotive products.
  Services
    The surplus on services decreased to $18.9 billion in the third quarter from $21.6 billion
in the second.
    Service receipts edged up to $74.3 billion from $74.2 billion.  Increases in travel, in
"other" transportation, and in passenger fares more than offset decreases in royalties and license
fees and in "other" private services, such as financial services and business, professional, and
technical services.
    Service payments increased to $55.4 billion from $52.6 billion, reflecting increases in all
services categories.  The largest increases were in royalties and license fees, resulting from
payments for rights to broadcast the 2000 Olympic Games, in travel, in "other" transportation, and
in "other" private services.
Income
    The deficit on income increased to $4.5 billion in the third quarter from $4.1 billion in the
second.
  Investment income
    Income receipts on U.S.-owned assets abroad decreased to $86.2 billion from $87.1 billion.
Decreases in direct investment receipts and in U.S. Government receipts more than offset an increase
in "other" private receipts.
    Income payments on foreign-owned assets in the United States decreased to $89.4 billion
from $89.8 billion.  A decrease in direct investment payments more than offset increases in "other"
private payments and in U.S. Government payments.
  Compensation of employees
    Receipts for compensation of U.S. workers abroad were unchanged at $0.6 billion.  Payments
for compensation of foreign workers in the United States edged down to $1.9 billion from $2.0 billion.
Unilateral current transfers
    Unilateral current transfers were net outflows of $12.8 billion in the third quarter, up from
net outflows of $12.3 billion in the second.  The increase was accounted for by increases in U.S.
Government grants and in private remittances and other transfers.
                                Capital and Financial Account
                                       Capital Account
    Capital account transactions were net inflows of $0.2 billion in the third quarter, unchanged
from the second.
                                      Financial Account
    Net recorded financial inflows--the difference between changes in U.S.-owned assets abroad
and changes in foreign-owned assets in the United States--were $123.0 billion in the third quarter,
compared with $152.7 billion (revised) in the second.  Financial inflows for foreign-owned assets in
the United States decreased more than financial outflows for U.S.-owned assets abroad.
U.S.-owned assets abroad
    U.S.-owned assets abroad increased $77.2 billion in the third quarter, following an increase
of $92.4 billion in the second.
    U.S. claims on foreigners reported by U.S. banks increased $11.4 billion in the third quarter,
in contrast to a decrease of $18.3 billion in the second.  The third-quarter increase was largely
attributable to lending by foreign-owned banks in the United States to their own offices abroad.
    Net U.S. purchases of foreign securities were $30.4 billion in the third quarter, down from
$38.2 billion in the second.  Net U.S. purchases of foreign stocks were $12.5 billion, down sharply
from $45.0 billion; the decrease was attributable to a reduction in exchanges of stock related to
purchases of U.S. companies by foreign companies.  Net U.S. transactions in foreign bonds shifted
to net U.S. purchases of $17.9 billion from net U.S. sales of $6.8 billion, partly as a result of an
increase in new foreign issues in the United States.
    Net financial outflows for U.S. direct investment abroad were $36.1 billion in the third
quarter, down from $37.5 billion in the second.  A decrease in net equity outflows more than offset
an increase in reinvested earnings and smaller inflows for net intercompany debt.
    U.S. official reserve assets increased $0.3 billion in the third quarter, in contrast to a
decrease of $2.0 billion in the second.
Foreign-owned assets in the United States
    Foreign-owned assets in the United States increased $200.2 billion in the third quarter,
following an increase of $245.1 billion in the second.
    U.S. liabilities to foreigners reported by U.S. banks, excluding U.S. Treasury securities,
increased $14.0 billion in the third quarter, following an increase of $46.9 billion in the second.
The third-quarter increase was largely attributable to borrowing by foreign-owned banks in the
United States from their own offices abroad.
    Net sales of U.S. Treasury securities by foreigners were $12.6 billion in the third quarter,
down from $20.6 billion in the second.  The decrease was largely accounted for by a decrease in net
sales by investors in Western Europe.
    Net foreign purchases of U.S. securities other than U.S. Treasury securities were $118.9
billion in the third quarter, up from $87.1 billion in the second.  Net foreign purchases of U.S.
stocks were $46.8 billion, up sharply from $26.3 billion; the increase was attributable to shifts to
net purchases by investors in Caribbean financial centers and in Japan and to an increase in net
purchases by investors in Western Europe.  Net foreign purchases of U.S. corporate and other
bonds were a record $72.1 billion, up from $60.8 billion; the increase was partly attributable to
record net foreign purchases of U.S. federally sponsored agency bonds.
    Net financial inflows for foreign direct investment in the United States were $64.9 billion in
the third quarter, down from $100.3 billion in the second.  Although net equity inflows fell sharply,
they remained strong as a result of numerous large acquisitions.  Net intercompany debt inflows
and reinvested earnings both decreased.
    Net U.S. currency shipments from the United States to foreign countries were $0.8 billion in
the third quarter, down from $1.0 billion in the second.
    Foreign official assets in the United States increased $11.6 billion in the third quarter,
following an increase of $6.3 billion in the second.
    The statistical discrepancy--errors and omissions in recorded transactions--was a negative
$9.4 billion in the third quarter, following a negative $47.9 billion in the second.
    In the third quarter, the U.S. dollar appreciated 2 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 $105.0 billion from $106.1 billion.  The
goods deficit was unchanged at $110.2 billion; the services surplus was revised to $21.6 billion
from $21.0 billion; the deficit on income was revised to $4.1 billion from $4.5 billion; and
unilateral current transfers were unchanged at net outflows of $12.3 billion.
                                    *          *          *
    Release dates for 2001:
    Fourth quarter 2000...............................................March 15, 2001 (Thursday)
    First quarter 2001.................................................June 21, 2001 (Thursday)
    Second quarter 2001..........................................September 12, 2001 (Wednesday)
    Third quarter 2001............................................December 12, 2001 (Wednesday)
                                    *          *          *
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    Summary BEA estimates are available on recorded messages at the time of public release at
the following telephone numbers:
               (202) 606-5362 U.S. international transactions
                        -5306 Gross domestic product
                        -5303 Personal income and outlays
    Most of BEA's estimates and analyses are published in the Survey of Current Business,
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                                                                                                                                                               December 14, 2000
    Table 1.--U.S. International Transactions
    [Millions of dollars, quarters seasonally adjusted]
                                                                                                           1999                                2000                      Change:
                                       (Credits +, debits -)                                    1999                                                                      2000
                                                                                                             I       II       III      IV        I       IIr     IIIp    II-III
                                         Current account
     1 Exports of goods and services and income receipts....................................   1,232,407  293,717  300,994  313,084  324,612  336,854  353,622  361,467    7,845
     2      Exports of goods and services...................................................     956,242  230,321  234,297  241,969  249,653  255,977  265,969  274,657    8,688
     3          Goods, balance of payments basis............................................     684,358  163,949  166,443  173,881  180,085  183,728  191,783  200,385    8,602
     4          Services....................................................................     271,884   66,372   67,854   68,088   69,568   72,249   74,186   74,272       86
     5              Transfers under U.S. military agency sales contracts....................      16,334    4,240    4,561    3,944    3,589    3,574    3,699    3,720       21
     6              Travel..................................................................      74,881   18,140   18,564   18,695   19,482   20,431   21,363   21,567      204
     7              Passenger fares.........................................................      19,776    4,814    4,902    5,105    4,955    5,062    5,387    5,475       88
     8              Other transportation....................................................      27,033    6,515    6,692    6,728    7,097    7,252    7,434    7,596      162
     9               Royalties and license fees.............................................      36,467    9,114    9,140    9,106    9,107    9,353    9,584    9,349     -235
    10               Other private services.................................................      96,508   23,346   23,772   24,271   25,118   26,373   26,506   26,345     -161
    11               U.S. Government miscellaneous services.................................         885      203      223      239      220      204      213      220        7
    12      Income receipts.................................................................     276,165   63,396   66,697   71,115   74,959   80,877   87,653   86,810     -843
    13           Income receipts on U.S.-owned assets abroad................................     273,957   62,861   66,149   70,556   74,393   80,302   87,070   86,221     -849
    14               Direct investment receipts.............................................     118,802   26,946   28,804   31,361   31,691   34,116   37,898   37,340     -558
    15               Other private receipts.................................................     151,958   35,004   36,535   38,449   41,970   45,091   47,938   48,050      112
    16               U.S. Government receipts...............................................       3,197      911      810      746      732    1,095    1,234      831     -403
    17           Compensation of employees..................................................       2,208      535      548      559      566      575      583      589        6
    18 Imports of goods and services and income payments....................................  -1,515,861 -349,513 -368,439 -391,337 -406,575 -426,335 -446,323 -462,488  -16,165
    19      Imports of goods and services...................................................  -1,221,213 -282,997 -297,597 -314,687 -325,933 -341,094 -354,567 -371,160  -16,593
    20          Goods, balance of payments basis............................................  -1,029,917 -236,973 -250,427 -266,199 -276,318 -289,566 -302,014 -315,801  -13,787
    21          Services....................................................................    -191,296  -46,024  -47,170  -48,488  -49,615  -51,528  -52,553  -55,359   -2,806
    22              Direct defense expenditures.............................................     -13,650   -3,293   -3,373   -3,626   -3,358   -3,322   -3,431   -3,450      -19
    23              Travel..................................................................     -59,351  -14,560  -14,718  -14,799  -15,274  -15,837  -16,044  -16,704     -660
    24              Passenger fares.........................................................     -21,405   -5,215   -5,274   -5,348   -5,568   -5,777   -5,944   -6,203     -259
    25              Other transportation....................................................     -34,137   -7,784   -8,187   -8,953   -9,214   -9,582   -9,900  -10,461     -561
    26               Royalties and license fees.............................................     -13,275   -3,081   -3,224   -3,314   -3,656   -3,590   -3,661   -4,512     -851
    27               Other private services.................................................     -46,657  -11,401  -11,719  -11,682  -11,855  -12,706  -12,859  -13,305     -446
    28               U.S. Government miscellaneous services.................................      -2,821     -690     -675     -766     -690     -714     -714     -724      -10
    29      Income payments.................................................................    -294,648  -66,516  -70,842  -76,650  -80,642  -85,241  -91,756  -91,328      428
    30           Income payments on foreign-owned assets in the United States...............    -287,059  -64,636  -68,962  -74,749  -78,712  -83,289  -89,776  -89,393      383
    31               Direct investment payments.............................................     -56,098  -10,916  -14,106  -15,660  -15,416  -17,048  -18,883  -15,782    3,101
    32               Other private payments.................................................    -135,830  -31,051  -31,701  -34,942  -38,136  -40,167  -43,992  -46,242   -2,250
    33               U.S. Government payments...............................................     -95,131  -22,669  -23,155  -24,147  -25,160  -26,074  -26,901  -27,369     -468
    34           Compensation of employees..................................................      -7,589   -1,880   -1,880   -1,901   -1,930   -1,952   -1,980   -1,935       45
    35 Unilateral current transfers, net....................................................     -48,025  -10,831  -11,537  -11,396  -14,260  -12,024  -12,270  -12,752     -482
    36      U.S. Government grants..........................................................     -13,774   -2,574   -3,097   -2,847   -5,256   -2,912   -3,232   -3,581     -349
    37      U.S. Government pensions and other transfers....................................      -4,401   -1,066   -1,074   -1,080   -1,181   -1,114   -1,125   -1,129       -4
    38      Private remittances and other transfers.........................................     -29,850   -7,191   -7,366   -7,469   -7,823   -7,998   -7,913   -8,042     -129
                                                                                                                                                               December 14, 2000
    Table 1.--U.S. International Transactions (Continued)
    [Millions of dollars, quarters seasonally adjusted]
                                                                                                           1999                                2000                      Change:
                                       (Credits +, debits -)                                    1999                                                                      2000
                                                                                                             I       II       III      IV        I       IIr     IIIp    II-III
                                   Capital and financial account
                                          Capital account
    39 Capital account transactions, net....................................................      -3,500      157      165      171   -3,993      166      170      165       -5
                                         Financial account
    40 U.S.-owned assets abroad, net (increase/financial outflow (-)).......................    -430,187  -21,555 -170,842 -122,909 -114,882 -178,958  -92,424  -77,204   15,220
    41     U.S. official reserve assets, net................................................       8,747    4,068    1,159    1,951    1,569     -554    2,020     -346   -2,366
    42          Gold........................................................................        ....     ....     ....     ....     ....     ....     ....     ....     ....
    43          Special drawing rights......................................................          10      562     -190     -184     -178     -180     -180     -182       -2
    44          Reserve position in the International Monetary Fund.........................       5,484        3    1,413    2,268    1,800     -237    2,328    1,300   -1,028
    45          Foreign currencies..........................................................       3,253    3,503      -64     -133      -53     -137     -128   -1,464   -1,336
    46     U.S. Government assets, other than official reserve assets, net..................       2,751      118     -392     -686    3,711     -131     -574      110      684
    47          U.S. credits and other long-term assets.....................................      -6,175   -1,314   -2,167   -1,595   -1,099   -1,750   -1,235   -1,052      183
    48          Repayments on U.S. credits and other long-term assets.......................       9,560    1,554    1,887    1,026    5,093    1,328      720    1,263      543
    49          U.S. foreign currency holdings and U.S. short-term assets, net..............        -634     -122     -112     -117     -283      291      -59     -101      -42
    50     U.S. private assets, net.........................................................    -441,685  -25,741 -171,609 -124,174 -120,162 -178,273  -93,870  -76,968   16,902
    51          Direct investment...........................................................    -150,901  -41,112  -32,958  -43,552  -33,280  -42,963  -37,487  -36,088    1,399
    52          Foreign securities..........................................................    -128,594    1,107  -71,131  -41,420  -17,150  -27,236  -38,196  -30,428    7,768
    53          U.S. claims on unaffiliated foreigners reported by
                     U.S. nonbanking concerns...............................................     -92,328  -14,223  -25,734  -27,943  -24,428  -52,563  -36,507      931   37,438
    54          U.S. claims reported by U.S. banks, not included elsewhere..................     -69,862   28,487  -41,786  -11,259  -45,304  -55,511   18,320  -11,383  -29,703
    55 Foreign-owned assets in the United States, net (increase/financial inflow (+)).......     753,564  102,780  272,008  194,210  184,567  236,535  245,149  200,169  -44,980
    56     Foreign official assets in the United States, net................................      42,864    4,274   -1,096   12,191   27,495   22,015    6,346   11,625    5,279
    57          U.S. Government securities..................................................      32,527    6,793     -916   14,798   11,852   24,305    6,334    5,271   -1,063
    58              U.S. Treasury securities................................................      12,177      800   -6,708   12,963    5,122   16,198   -4,000   -9,001   -5,001
    59              Other...................................................................      20,350    5,993    5,792    1,835    6,730    8,107   10,334   14,272    3,938
    60          Other U.S. Government liabilities...........................................      -3,255   -1,485   -1,099     -760       89     -644     -781     -620      161
    61          U.S. liabilities reported by U.S. banks, not included elsewhere.............      12,692   -1,139    1,436   -2,032   14,427   -2,577     -111    6,339    6,450
    62          Other foreign official assets...............................................         900      105     -517      185    1,127      931      904      635     -269
    63     Other foreign assets in the United States, net...................................     710,700   98,506  273,104  182,019  157,072  214,520  238,803  188,544  -50,259
    64          Direct investment...........................................................     275,533   26,779  143,802   55,563   49,390   48,962  100,323   64,933  -35,390
    65          U.S. Treasury securities....................................................     -20,464   -7,505   -5,407    9,639  -17,191   -9,248  -20,597  -12,642    7,955
    66          U.S. securities other than U.S. Treasury securities.........................     331,523   62,815   80,838   95,620   92,250  132,416   87,107  118,882   31,775
    67          U.S. currency...............................................................      22,407    2,440    3,057    4,697   12,213   -6,847      989      757     -232
    68          U.S. liabilities to unaffiliated foreigners reported by
                     U.S. nonbanking  concerns..............................................      34,298   27,928   13,663   -8,085      792   58,061   24,038    2,633  -21,405
    69          U.S. liabilities reported by U.S. banks, not included elsewhere.............      67,403  -13,951   37,151   24,585   19,618   -8,824   46,943   13,981  -32,962
    70 Statistical discrepancy (sum of above items with sign reversed)......................      11,602  -14,755  -22,349   18,177   30,531   43,762  -47,924   -9,357   38,567
       Memoranda:
    71 Balance on goods (lines 3 and 20)....................................................    -345,559  -73,024  -83,984  -92,318  -96,233 -105,838 -110,231 -115,416   -5,185
    72 Balance on services (lines 4 and 21).................................................      80,588   20,348   20,684   19,600   19,953   20,721   21,633   18,913   -2,720
    73 Balance on goods and services (lines 2 and 19).......................................    -264,971  -52,676  -63,300  -72,718  -76,280  -85,117  -88,598  -96,503   -7,905
    74 Balance on income (lines 12 and 29)..................................................     -18,483   -3,120   -4,145   -5,535   -5,683   -4,364   -4,103   -4,518     -415
    75 Unilateral current transfers, net (line 35)..........................................     -48,025  -10,831  -11,537  -11,396  -14,260  -12,024  -12,270  -12,752     -482
    76 Balance on current account (lines 1, 18, and 35 or lines 73, 74, and 75).............    -331,479  -66,627  -78,982  -89,649  -96,223 -101,505 -104,971 -113,773   -8,802
    r  Revised.  p  Preliminary.
    NOTE:--Details may not add to totals because of rounding.     Source:  U. S. Department of Commerce, Bureau of Economic Analysis

 

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