News Release

FOR WIRE TRANSMISSION: 8:30 A.M. EST, THURSDAY, DECEMBER 12, 2002
BEA 02-37

U.S. International Transactions: Third Quarter 2002




The tables in this release are available in an XLS spreadsheet and the entire release is available in PDF format.



Douglas B. Weinberg:       (202) 606-9590                            BEA 02-37

Recorded Message:                606-5362

       U.S. International Transactions: Third Quarter 2002

                            Current Account

   The U.S. current-account deficit--the combined balances on trade in goods
and services, income, and net unilateral current transfers--was $127.0 billion
(preliminary) in the third quarter of 2002, little changed from $127.6 billion
(revised) in the second quarter, according to the U.S. Bureau of Economic
Analysis.  A decrease in the deficit on income more than offset increases in
the deficit on goods and services and in net outflows for unilateral current
transfers.

NOTE: This news release is available on BEA's Web site at
<www.bea.gov/newsreleases/rels.htm>.

Goods and services

   The deficit on goods and services increased to $110.9 billion in the third
quarter from $109.3 billion in the second, as imports of goods and services
increased more than exports of goods and services.

   Goods

   The deficit on goods increased to $123.2 billion in the third quarter
from $122.5 billion in the second.

   Goods exports increased to $175.7 billion from $172.4 billion.  The increase
was largely accounted for by increases in civilian aircraft, in automotive
products, and in consumer goods.

   Goods imports increased to $298.9 billion from $294.9 billion.  Nonpetroleum
products increased, largely as a result of increases in consumer goods, in
nonpetroleum industrial supplies and materials, and in automotive products.
Petroleum and products also increased.

   Services

   The surplus on services decreased to $12.3 billion in the third
quarter from $13.2 billion in the second.

   Services receipts increased to $73.7 billion from $72.1 billion.  The
largest increase was in "other" private services (which includes items such as
business, professional, and technical services; insurance services; and
financial services).

   Services payments increased to $61.4 billion from $59.0 billion.  Most
services categories increased, and the largest increase was in "other" private
services.


Income

   The balance on income was a deficit of $3.0 billion in the third quarter,
compared to a deficit of $5.3 billion in the second.  Major contributors to
the reduction in the deficit were an increase in direct investment receipts
and a decrease in "other" private payments (income on banking and nonbanking
balances and on securities holdings); these contributors were partly offset
by an increase in direct investment payments.

   Investment income

   Income receipts on U.S.-owned assets abroad increased to
$62.9 billion from $60.1 billion.  The increase was more than accounted for
by a large increase in direct investment receipts.

   Income payments on foreign-owned assets in the United States increased to
$64.2 billion from $63.7 billion.  A large increase in direct investment
payments was mostly offset by decreases in U.S. Government payments and in
"other" private payments.

   Compensation of employees

   Receipts for compensation of U.S. workers abroad
were virtually unchanged at $0.6 billion.  Payments for compensation of
foreign workers in the United States edged down to $2.2 billion.

Unilateral current transfers

   Unilateral current transfers (which includes items such as U.S. Government
grants and institutional remittances) were net outflows of $13.2 billion in
the third quarter, up from net outflows of $13.0 billion in the second.


                 Capital and Financial Account

                         Capital Account

   Capital account transactions were net inflows of $0.2 billion in the third
quarter, virtually unchanged from the second.

                       Financial Account

   Net recorded financial inflows--net acquisitions by foreign residents of
assets in the United States less net acquisitions by U.S. residents of assets
abroad--were $172.4 billion in the third quarter, compared with $73.2 billion
(revised) in the second.

U.S.-owned assets abroad

   U.S.-owned assets abroad decreased $23.9 billion in the third quarter, in
contrast to an increase of $131.1 billion in the second.

   U.S. claims on foreigners reported by U.S. banks decreased $46.4 billion
in the third quarter, in contrast to an increase of $68.7 billion in the
second.  Interbank claims fell sharply.

   Transactions in foreign securities shifted to net U.S. sales of $18.3
billion in the third quarter from net U.S. purchases of $9.7 billion in the
second.  Transactions in foreign stocks shifted to net U.S. sales of $12.7
billion from net U.S. purchases of $19.9 billion; transactions with most
foreign countries shifted to net U.S. sales.  Net U.S. sales of foreign bonds
were $5.6 billion, down from $10.2 billion.

   Net financial outflows for U.S. direct investment abroad were $27.5 billion
in the third quarter, down from $34.3 billion in the second.  A shift in
intercompany debt to net inflows from net outflows more than offset increases
in net equity capital outflows and in reinvested earnings.

   U.S. official reserve assets increased $1.4 billion in the third quarter,
following an increase of $1.8 billion in the second.

Foreign-owned assets in the United States

   Foreign-owned assets in the United States increased $148.5 billion in the
third quarter, following an increase of $204.3 billion in the second.

   U.S. liabilities to foreigners reported by U.S. banks, excluding U.S.
Treasury securities, increased $8.3 billion in the third quarter, following an
increase of $32.2 billion in the second.

   Net foreign purchases of U.S. securities other than U.S. Treasury
securities were $46.6 billion in the third quarter, down from $104.4 billion
in the second.  Net foreign purchases of U.S. bonds were $39.2 billion, down
from $93.0 billion; net foreign purchases of U.S. corporate bonds fell
sharply, and net foreign purchases of U.S. agency bonds also declined.  Net
foreign purchases of U.S. stocks were $7.4 billion, down from $11.4 billion.

   Transactions in U.S. Treasury securities shifted to net foreign purchases
of $54.7 billion in the third quarter from net foreign sales of $5.1 billion
in the second.  Third-quarter net foreign purchases were the second highest
on record.

   Financial flows for foreign direct investment in the United States shifted
to net inflows of $11.0 billion in the third quarter from net outflows of $2.7
billion in the second.  Reinvested earnings and net equity capital inflows
both increased, and net outflows for intercompany debt decreased.

   Net U.S. currency shipments to foreigners were $2.6 billion in the third
quarter, down from $7.2 billion in the second.

   Foreign official assets in the United States increased $9.3 billion in the
third quarter, following an increase of $47.3 billion in the second.

   The statistical discrepancy--errors and omissions in recorded transactions--
was a negative $45.6 billion in the third quarter, in contrast to a positive
$54.2 billion in the second.

   In the third quarter, the U.S. dollar depreciated 4 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 $127.6
billion from $130.0 billion.  The goods deficit was revised to $122.5 billion
from $122.6 billion; the services surplus was revised to $13.2 billion from
$12.0 billion; the deficit on income was revised to $5.3 billion from
$6.3 billion; and unilateral current transfers were revised to net outflows
of $13.0 billion from net outflows of $13.1 billion.  Net recorded financial
inflows were revised to $73.2 billion from $80.4 billion.


                    *          *          *

Release dates in 2003:

Fourth quarter and year 2002............................March 14, 2003 (Friday)
First quarter 2003.....................................June 19, 2003 (Thursday)
Second quarter 2003.................................September 15, 2003 (Monday)
Third quarter 2003..................................December 16, 2003 (Tuesday)

                    *          *          *

   BEA's major national, regional, international, and industry estimates,
the Survey of Current Business, and BEA news releases are available on BEA's
Web site:

                         <www.bea.gov>

   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, BEA's monthly journal.  Subscriptions and single copies of the
printed Survey are for sale by the Superintendent of Documents, U.S. Government
Printing Office.  Internet: <bookstore.gpo.gov>; phone: 202-512-1800;
fax: 202-512-2250; mail: Stop SSOP, Washington, DC 20402-0001.


                             - more -
                                                                                                                                                                             December 12, 2002

    Table 1.--U.S. International Transactions
    [Millions of dollars, quarters seasonally adjusted]

                                                                                                          2001                                        2002                            Change:
                                       (Credits +, debits -)                                   2001                                                                                    2002
                                                                                                            I         II         III        IV          I         IIr       IIIp      II-III

                                         Current account

     1 Exports of goods and services and income receipts.................................... 1,281,793    349,040    331,612    309,477    291,667    291,348    305,262    312,881      7,619

     2      Exports of goods and services...................................................   998,022    266,004    256,766    242,325    232,930    233,252    244,540    249,409      4,869

     3          Goods, balance of payments basis............................................   718,762    193,284    184,846    173,274    167,358    164,649    172,426    175,727      3,301

     4          Services....................................................................   279,260     72,720     71,920     69,051     65,572     68,603     72,114     73,682      1,568
     5              Transfers under U.S. military agency sales contracts....................    12,220      2,806      3,227      3,079      3,108      2,990      3,087      2,922       -165

     6              Travel..................................................................    73,119     20,735     19,803     17,845     14,736     17,038     17,200     17,586        386
     7              Passenger fares.........................................................    18,007      5,007      4,849      4,522      3,629      4,171      4,172      4,503        331
     8              Other transportation....................................................    28,306      7,495      7,170      6,968      6,674      6,805      6,986      7,159        173

     9               Royalties and license fees.............................................    38,668      9,717      9,743      9,537      9,672      9,931     11,085     11,020        -65
    10               Other private services.................................................   108,109     26,738     26,927     26,886     27,559     27,473     29,385     30,292        907
    11               U.S. Government miscellaneous services.................................       831        222        201        214        194        195        199        200          1

    12      Income receipts.................................................................   283,771     83,036     74,846     67,152     58,737     58,096     60,722     63,472      2,750
    13           Income receipts on U.S.-owned assets abroad................................   281,389     82,444     74,253     66,555     58,137     57,485     60,108     62,854      2,746
    14               Direct investment receipts.............................................   125,996     35,270     33,078     30,211     27,436     28,679     30,958     33,763      2,805
    15               Other private receipts.................................................   151,832     46,281     40,398     35,494     29,659     27,994     28,486     28,231       -255
    16               U.S. Government receipts...............................................     3,561        893        777        850      1,042        812        664        860        196
    17           Compensation of employees..................................................     2,382        592        593        597        600        611        614        618          4

    18 Imports of goods and services and income payments....................................-1,625,701   -445,154   -418,930   -388,448   -373,174   -387,786   -419,862   -426,701     -6,839

    19      Imports of goods and services...................................................-1,356,312   -363,164   -350,090   -322,103   -320,958   -328,744   -353,853   -360,270     -6,417

    20          Goods, balance of payments basis............................................-1,145,927   -306,316   -292,565   -279,025   -268,021   -271,073   -294,893   -298,903     -4,010

    21          Services....................................................................  -210,385    -56,848    -57,525    -43,078    -52,937    -57,671    -58,960    -61,367     -2,407
    22              Direct defense expenditures.............................................   -15,198     -3,548     -3,512     -3,785     -4,353     -4,488     -4,766     -5,005       -239

    23              Travel..................................................................   -60,117    -16,003    -16,698    -14,468    -12,948    -14,587    -14,454    -14,995       -541
    24              Passenger fares.........................................................   -22,418     -5,810     -6,213     -5,944     -4,451     -5,113     -5,028     -5,352       -324
    25              Other transportation....................................................   -38,823    -10,521    -10,130     -9,178     -8,997     -8,858     -9,739     -9,709         30

    26               Royalties and license fees.............................................   -16,359     -4,097     -4,038     -4,113     -4,110     -4,764     -4,951     -5,264       -313
    27               Other private services.................................................   -54,588    -16,146    -16,208     -4,864    -17,371    -19,120    -19,297    -20,317     -1,020
    28               U.S. Government miscellaneous services.................................    -2,882       -723       -726       -726       -707       -741       -725       -725       ....

    29      Income payments.................................................................  -269,389    -81,990    -68,840    -66,345    -52,216    -59,042    -66,009    -66,431       -422
    30           Income payments on foreign-owned assets in the United States...............  -260,850    -79,881    -66,727    -64,210    -50,035    -56,803    -63,737    -64,229       -492
    31               Direct investment payments.............................................   -23,401    -13,021     -5,246     -6,303      1,166     -6,610    -12,163    -14,942     -2,779
    32               Other private payments.................................................  -156,784    -45,512    -40,886    -38,156    -32,230    -31,679    -32,943    -31,114      1,829
    33               U.S. Government payments...............................................   -80,665    -21,348    -20,595    -19,751    -18,971    -18,514    -18,631    -18,173        458
    34           Compensation of employees..................................................    -8,539     -2,109     -2,113     -2,135     -2,181     -2,239     -2,272     -2,202         70

    35 Unilateral current transfers, net....................................................   -49,463    -11,608    -11,916    -12,360    -13,579    -16,016    -13,011    -13,221       -210

    36      U.S. Government grants..........................................................   -11,628     -2,419     -2,522     -2,905     -3,782     -6,273     -3,312     -3,147        165
    37      U.S. Government pensions and other transfers....................................    -5,798     -1,316     -1,291     -1,305     -1,886     -1,348     -1,356     -1,368        -12
    38      Private remittances and other transfers.........................................   -32,037     -7,873     -8,103     -8,150     -7,911     -8,395     -8,343     -8,706       -363

                                                                                                                                                                             December 12, 2002
    Table 1.--U.S. International Transactions (Continued)
    [Millions of dollars, quarters seasonally adjusted]

                                                                                                          2001                                        2002                            Change:
                                       (Credits +, debits -)                                   2001                                                                                    2002
                                                                                                            I         II         III        IV          I         IIr       IIIp      II-III

                                   Capital and financial account

                                          Capital account

    39 Capital account transactions, net....................................................       826        208        207        206        205        208        200        223         23

                                         Financial account

    40 U.S.-owned assets abroad, net (increase/financial outflow (-)).......................  -370,962   -215,815    -80,036     24,978   -100,088    -25,918   -131,079     23,920    154,999

    41     U.S. official reserve assets, net................................................    -4,911        190     -1,343     -3,559       -199        390     -1,843     -1,416        427
    42          Gold........................................................................     .....       ....       ....       ....       ....       ....       ....       ....       ....
    43          Special drawing rights......................................................      -630       -189       -156       -145       -140       -109       -107       -132        -25
    44          Reserve position in the International Monetary Fund.........................    -3,600        574     -1,015     -3,242         83        652     -1,607     -1,136        471
    45          Foreign currencies..........................................................      -681       -195       -172       -172       -142       -153       -129       -148        -19

    46     U.S. Government assets, other than official reserve assets, net..................      -486         77       -783         77        143        133         42        172        130
    47          U.S. credits and other long-term assets.....................................    -4,431     -1,094     -1,330     -1,011       -996       -853       -565       -897       -332
    48          Repayments on U.S. credits and other long-term assets.......................     3,873      1,071        573      1,118      1,111        994        566      1,190        624
    49          U.S. foreign currency holdings and U.S. short-term assets, net..............        72        100        -26        -30         28         -8         41       -121       -162

    50     U.S. private assets, net.........................................................  -365,565   -216,082    -77,910     28,460   -100,032    -26,441   -129,278     25,164    154,442
    51          Direct investment...........................................................  -127,840    -23,514    -35,131    -41,724    -27,470    -29,280    -34,255    -27,463      6,792
    52          Foreign securities..........................................................   -94,662    -26,895    -51,764     10,087    -26,090      2,047     -9,675     18,295     27,970
    53          U.S. claims on unaffiliated foreigners reported by
                     U.S. nonbanking concerns...............................................   -14,358    -51,759      9,670     -9,479     37,210         65    -16,693    -12,087      4,606
    54          U.S. claims reported by U.S. banks, not included elsewhere..................  -128,705   -113,914       -685     69,576    -83,682        727    -68,655     46,419    115,074

    55 Foreign-owned assets in the United States, net (increase/financial inflow (+)).......   752,806    302,510    181,610     17,889    250,797    113,496    204,307    148,510    -55,797

    56     Foreign official assets in the United States, net................................     5,224      4,087    -20,831     16,882      5,086      7,641     47,252      9,319    -37,933
    57          U.S. Government securities..................................................    31,665      2,547    -10,866     15,594     24,390      6,714     21,741     12,309     -9,432
    58              U.S. Treasury securities................................................    10,745     -1,027    -20,798     15,810     16,760       -582     15,193      1,424    -13,769
    59              Other...................................................................    20,920      3,574      9,932       -216      7,630      7,296      6,548     10,885      4,337
    60          Other U.S. Government liabilities...........................................    -1,882       -676       -791         89       -504       -790         54        999        945
    61          U.S. liabilities reported by U.S. banks, not included elsewhere.............   -30,278      1,213    -10,202       -782    -20,507        991     24,531     -4,824    -29,355
    62          Other foreign official assets...............................................     5,719      1,003      1,028      1,981      1,707        726        926        835        -91

    63     Other foreign assets in the United States, net...................................   747,582    298,423    202,441      1,007    245,711    105,855    157,055    139,191    -17,864
    64          Direct investment...........................................................   130,796     43,589     51,102     14,208     21,897     16,223     -2,704     11,037     13,741
    65          U.S. Treasury securities....................................................    -7,670     -4,744    -14,685    -15,470     27,229     -7,282     -5,124     54,691     59,815
    66          U.S. securities other than U.S. Treasury securities.........................   407,653    129,990    113,556     64,787     99,320     71,095    104,404     46,647    -57,757
    67          U.S. currency...............................................................    23,783      2,311      2,772      8,203     10,497      4,525      7,183      2,556     -4,627
    68          U.S. liabilities to unaffiliated foreigners reported by
                     U.S. nonbanking  concerns..............................................    82,353    111,644     -5,307    -25,154      1,170     32,345     21,056     15,961     -5,095
    69          U.S. liabilities reported by U.S. banks, not included elsewhere.............   110,667     15,633     55,003    -45,567     85,598    -11,051     32,240      8,299    -23,941

    70 Statistical discrepancy (sum of above items with sign reversed)......................    10,701     20,819     -2,547     48,258    -55,828     24,668     54,183    -45,612    -99,795

    71 Balance on goods (lines 3 and 20)....................................................  -427,165   -113,032   -107,719   -105,751   -100,663   -106,424   -122,467   -123,176       -709
    72 Balance on services (lines 4 and 21).................................................    68,875     15,872     14,395     25,973     12,635     10,932     13,154     12,315       -839
    73 Balance on goods and services (lines 2 and 19).......................................  -358,290    -97,160    -93,324    -79,778    -88,028    -95,492   -109,313   -110,861     -1,548
    74 Balance on income (lines 12 and 29)..................................................    14,382      1,046      6,006        807      6,521       -946     -5,287     -2,959      2,328
    75 Unilateral current transfers, net (line 35)..........................................   -49,463    -11,608    -11,916    -12,360    -13,579    -16,016    -13,011    -13,221       -210
    76 Balance on current account (lines 1, 18, and 35 or lines 73, 74, and 75).............  -393,371   -107,722    -99,234    -91,331    -95,086   -112,454   -127,611   -127,041        570

    r  Revised.  p  Preliminary.

    NOTE:--Details may not add to totals because of rounding.     Source:  U. S. Bureau of Economic Analysis