News Release

FOR WIRE TRANSMISSION: 8:30 A.M. EST, WEDNESDAY, MARCH 16, 2005
BEA 05-10

U.S. International Transactions: Fourth Quarter and Year 2004




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

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Christopher Bach: (202) 606-9545                                      BEA 05-10


         U.S. International Transactions: Fourth Quarter and Year 2004

                                 Fourth Quarter

                                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
$187.9 billion in the fourth quarter of 2004 (preliminary) from $165.9 billion
(revised) in the third quarter.  The increase was largely accounted for by an
increase in the deficit on goods.  In addition, net outflows for unilateral
current transfers increased and the surplus on income decreased.  Partly
offsetting was an increase in the surplus on services.

Goods and services

        The deficit on goods and services increased to $171.1 billion in the
fourth quarter from $155.9 billion in the third.

        Goods

        The deficit on goods increased to $183.5 billion in the fourth quarter
from $167.0 billion in the third quarter.

        Goods exports increased to $208.6 billion from $205.0 billion.  Much of
  the increase was in industrial supplies and materials and in consumer goods.

        Goods imports increased to $392.1 billion from $372.0 billion.  Much of
the increase was in petroleum and petroleum products and in consumer goods.

        Services

        The surplus on services increased to $12.5 billion in the fourth
quarter from $11.2 billion in the third.

        Services receipts increased to $87.3 billion from $85.1 billion.  The
largest increases were in travel, in "other" transportation (such as freight
and port services), and in royalties and license fees.

        Services payments increased to $74.8 billion from $73.9 billion.
Increases in "other" transportation and in "other" private services were partly
offset by a decrease in royalties and license fees.


Income

        The surplus on income decreased to $2.1 billion in the fourth quarter
from $4.9 billion in the third.

        Investment income

        Income receipts on U.S.-owned assets abroad increased to $103.7 billion
from $92.0 billion.  The increase was accounted for by increases in direct
investment receipts and in "other" private receipts (which consists of interest
and dividends).

        Income payments on foreign-owned assets in the United States increased
to $100.1 billion from $85.7 billion.  An increase in "other" private payments
(which consists of interest and dividends) accounted for much of the increase,
but direct investment payments and U.S. Government payments (which consists of
interest) also increased.

        Compensation of employees

        Receipts for compensation of U.S. workers abroad were virtually
unchanged at $0.8 billion, and payments for compensation of foreign workers in
the United States were virtually unchanged at $2.2 billion.

Unilateral current transfers

        Unilateral current transfers were net outflows of $19.0 billion in the
fourth quarter, up from net outflows of $14.9 billion in the third; the
increase was mostly attributable to an increase in "private remittances and
other transfers."  In the third quarter, "private remittances and other
transfers" decreased as a result of large inflows to U.S. insurance companies
from foreign reinsurance companies as compensation for catastrophic damage
caused by major hurricanes.  "Private remittances and other transfers"
rebounded in the fourth quarter, as these inflows dissipated.  (For a
discussion of the impact of disasters on the national economic accounts, see
<www.bea.gov/bea/faq/national/disasters.htm>.)

                          Capital and Financial Account

                                  Capital Account

        Capital account transactions were net outflows of $0.4 billion in the
fourth quarter, virtually unchanged from the third.

                                 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 $183.8 billion in the fourth quarter, up from $128.7
billion in the third.  Financial inflows for foreign-owned assets in the United
States increased more than financial outflows for U.S.-owned assets abroad.

U.S.-owned assets abroad

        U.S.-owned assets abroad increased $276.5 billion in the fourth
quarter, following an increase of $127.6 billion in the third.

        U.S. claims on foreigners reported by U.S. banks increased $74.7
billion in the fourth quarter, following an increase of $55.0 billion in the
third.

        Net U.S. purchases of foreign securities were $27.2 billion in the
fourth quarter, up from $20.3 billion in the third.  Net U.S. purchases of
foreign stocks were $14.1 billion, down from $17.1 billion.  Net U.S. purchases
of foreign bonds were $13.1 billion, up from $3.2 billion.

        Net financial outflows for U.S. direct investment abroad were $101.3
billion in the fourth quarter, up from $43.3 billion in the third.  A shift to
large net equity capital outflows from small net inflows and an increase in
reinvested earnings more than offset an increase in net intercompany debt
inflows.

        U.S. official reserve assets decreased $0.7 billion in the fourth
quarter, following a decrease of $0.4 billion in the third.

Foreign-owned assets in the United States

        Foreign-owned assets in the United States increased $460.2 billion in
the fourth quarter, following an increase of $256.3 billion in the third.

        U.S. liabilities to foreigners reported by U.S. banks increased $117.6
billion in the fourth quarter, following an increase of $38.7 billion in the
third.

        Net foreign purchases of U.S. Treasury securities were $12.1 billion in
the fourth quarter, up from $0.9 billion in the third.

        Net foreign purchases of U.S. securities other than U.S. Treasury
securities were a record $170.2 billion in the fourth quarter, up sharply from
$93.0 billion in the third.  Net foreign purchases of U.S. stocks were $45.5
billion, up from $4.8 billion.  Net foreign purchases of U.S. corporate bonds
were $69.4 billion, down from $82.5 billion.  Net foreign purchases of
federally sponsored agency bonds were a record $55.3 billion, up from $5.7
billion.

        Net financial inflows for foreign direct investment in the United
States were $36.3 billion in the fourth quarter, up slightly from $35.9 billion
in the third.  An increase in reinvested earnings and a shift to net inflows on
intercompany debt from net outflows more than offset a decrease in net equity
capital inflows.

        Foreign official assets in the United States increased $82.0 billion in
the fourth quarter, following an increase of $72.0 billion in the third.

        Net U.S. currency shipments to foreigners were $5.3 billion in the
fourth quarter, up from $2.6 billion in the third.

        The statistical discrepancy--errors and omissions in recorded
transactions--was a positive $4.5 billion in the fourth quarter, compared with
a positive $37.5 billion in the third.

        In the fourth quarter, the U.S. dollar depreciated 5 percent on a
trade-weighted quarterly average basis against a group of 7 major currencies.


                                 The Year 2004

                                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
$665.9 billion in 2004 from $530.7 billion in 2003.  An increase in the deficit
on goods to $665.5 billion from $547.6 billion accounted for most of the
increase.  Other contributors to the increase in the deficit were a decrease in
the surplus on income to $24.1 billion from $33.3 billion, an increase in net
outflows on unilateral current transfers to $72.9 billion from $67.4 billion,
and a decrease in the surplus on services to $48.4 billion from $51.0 billion.
As a share of U.S. GDP, the deficit rose from 4.8 percent in 2003 to 5.7
percent in 2004.

Goods and services

        The deficit on goods and services increased to $617.1 billion in 2004
from $496.5 billion in 2003.

        Goods

        The deficit on goods increased to $665.5 billion in 2004 from $547.6
billion in 2003.

        Goods exports increased to $807.6 billion from $713.1 billion.  Two-
thirds of the increase was in capital goods and industrial supplies and
materials.

        Goods imports increased to $1,473.1 billion from $1,260.7 billion.
One-quarter of the increase was attributable to an increase in petroleum and
petroleum products.  Among nonpetroleum products, the largest increases were in
nonpetroleum industrial supplies and materials, capital goods, and consumer
goods.

        Services

        The surplus on services decreased to $48.4 billion in 2004 from $51.0
billion in 2003.

        Services exports increased to $339.6 billion from $307.4 billion.  The
largest increases were in travel and in "other" private services (such as
business, professional, and technical services, and financial services).

        Services imports increased to $291.2 billion from $256.3 billion.  The
largest increases were in "other" transportation (such as freight and port
services), "other" private services, and travel.

Income

        The surplus on income decreased to $24.1 billion in 2004 from $33.3
billion in 2003.

        Investment income

        Income receipts on U.S.-owned assets abroad increased to $365.9 billion
from $291.4 billion.  The increase was more than accounted for by direct
investment receipts and "other" private receipts (which consists of interest
and dividends).

        Income payments on foreign-owned assets in the United States increased
to $336.1 billion from $252.6 billion.  Direct investment payments, "other"
private payments, and U.S. Government payments all increased.

        Compensation of employees

        Receipts for compensation of U.S. workers abroad increased slightly
to $3.1 billion, and payments for compensation of foreign workers in the United
States increased to $8.9 billion from $8.5 billion.

Unilateral current transfers

        Unilateral current transfers were net outflows of $72.9 billion in
2004, up from net outflows of $67.4 billion in 2003.

                         Capital and Financial Account

                                Capital Account

        Capital account transactions were net outflows of $1.5 billion in 2004,
down from net outflows of $3.1 billion in 2003.

                               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 $615.5 billion in 2004, up from $545.8 billion in 2003.
Financial inflows for foreign-owned assets in the United States increased more
than financial outflows for U.S.-owned assets abroad.

U.S.-owned assets abroad

        U.S.-owned assets abroad increased $817.7 billion in 2004, compared
with an increase of $283.4 billion in 2003.

        U.S. claims on foreigners reported by U.S. banks increased $353.8
billion in 2004, compared with an increase of $10.4 billion in 2003.

        Net U.S. purchases of foreign securities were $90.8 billion in 2004,
compared with $72.3 billion in 2003.  Net U.S. purchases of foreign stocks were
$93.0 billion, down from $100.4 billion; these transactions included stock
swaps related to cross-border mergers and acquisitions.  Net U.S. sales of
foreign bonds were $2.2 billion, down from $28.1 billion.

        Net financial outflows for U.S. direct investment abroad were $248.5
billion in 2004, up from $173.8 billion in 2003.  Net equity outflows and
reinvested earnings both increased strongly, but were partly offset by a shift
to net inflows from net outflows for net intercompany debt.

        U.S. official reserve assets decreased $2.8 billion in 2004, following
a decrease of $1.5 billion in 2003.

Foreign-owned assets in the United States

        Foreign-owned assets in the United States increased $1,433.2 billion in
2004, compared with an increase of $829.2 billion in 2003.

        U.S. liabilities to foreigners reported by U.S. banks increased $338.2
billion in 2004, following an increase of $75.6 billion in 2003.

        Net foreign purchases of U.S. securities other than U.S. Treasury
securities were $414.1 billion in 2004, up from $251.0 billion in 2003.
Transactions in U.S. federally sponsored agency bonds shifted to net purchases
of $103.6 billion from net sales of $13.4 billion.  Net purchases of corporate
bonds were $254.2 billion, up from $227.1 billion.  Net foreign purchases of
stocks were $56.2 billion, up from $37.3 billion; these transactions included
stock swaps related to cross-border mergers and acquisitions.

        Net foreign purchases of U.S. Treasury securities were $108.1 billion
in 2004, down from $113.4 billion in 2003.

        Net financial inflows for foreign direct investment in the United
States were $115.5 billion in 2004, up from $39.9 billion in 2003.  Reinvested
earnings increased strongly, net intercompany debt outflows decreased, and net
equity capital inflows increased slightly.

        Foreign official assets in the United States increased $355.3 billion
in 2004, following an increase of $248.6 billion in 2003.

        Net U.S. currency shipments to foreigners were $14.8 billion in 2004,
down from $16.6 billion in 2003.

        The statistical discrepancy--errors and omission in recorded
transactions--was a positive $51.9 billion in 2004, compared with a negative
$12.0 billion in 2003.

        In 2004, the U.S. dollar depreciated 8 percent on a trade-weighted
yearly average basis against a group of 7 major currencies.

                                   Revisions

        The first three quarters of 2004 were revised to reflect revised
seasonal adjustments and, for the third quarter, receipt of new or revised
data.  Revisions to the first and second quarters were small.  In the third
quarter, the current-account deficit was revised to $165.9 billion from $164.7
billion.  The goods deficit was revised to $167.0 billion from $166.7; the
services surplus was revised to $11.2 billion from $11.4 billion; the income
surplus was revised to $4.9 billion from $5.3 billion; and unilateral current
transfers were revised to net outflows of $14.9 billion from net outflows of
$14.6 billion. Net recorded financial inflows were revised to $128.7 billion
from $153.2 billion.


                            *          *          *

	Release dates in 2005:

        Fourth quarter and year 2004.................March 16, 2005 (Wednesday)
        First quarter 2005...............................June 17, 2005 (Friday)
        Second quarter 2005.........................September 16, 2005 (Friday)
        Third quarter 2005...........................December 16, 2005 (Friday)


                            *          *          *


        Summary BEA estimates 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 estimates; 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.

                                                                                                                                                                                 March 16, 2005


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

                                                                                                                       Change:   2003       2004                                         Change:
                                          (Credits +, debits -)                              2003       2004p         2003-2004                                                           2004
                                                                                                                                 IV         Ir         IIr       IIIr        IVp         III-IV

                                             Current account

           1 Exports of goods and services and income receipts............................... 1,314,888  1,516,169    201,281    352,336    360,045    372,895    382,867    400,363     17,496

           2     Exports of goods and services............................................... 1,020,503  1,147,181    126,678    268,306    276,620    284,587    290,089    295,885      5,796

           3         Goods, balance of payments basis........................................   713,122    807,610     94,488    186,858    194,322    199,717    205,013    208,558      3,545

           4         Services................................................................   307,381    339,571     32,190     81,448     82,298     84,870     85,076     87,327      2,251
           5             Transfers under U.S. military agency sales contracts................    12,491     13,571      1,080      3,358      3,290      3,668      3,301      3,312         11

           6             Travel..............................................................    64,509     74,768     10,259     18,071     18,001     18,740     18,547     19,480        933
           7             Passenger fares.....................................................    15,693     18,939      3,246      4,310      4,534      4,724      4,760      4,921        161
           8             Other transportation................................................    31,833     37,047      5,214      8,548      9,070      9,215      9,150      9,612        462

           9             Royalties and license fees..........................................    48,227     51,341      3,114     12,481     12,478     12,586     12,950     13,326        376
          10             Other private services..............................................   133,818    143,150      9,332     34,477     34,741     35,750     36,179     36,481        302
          11             U.S. Government miscellaneous services..............................       810        755        -55        203        184        187        189        195          6

          12     Income receipts.............................................................   294,385    368,988     74,603     84,030     83,425     88,308     92,778    104,478     11,700
          13         Income receipts on U.S.-owned assets abroad.............................   291,354    365,886     74,532     83,239     82,666     87,565     91,992    103,664     11,672
          14             Direct investment receipts..........................................   187,522    237,564     50,042     56,843     55,448     57,898     58,650     65,570      6,920
          15             Other private receipts..............................................    99,135    125,295     26,160     25,074     26,433     29,055     32,521     37,286      4,765
          16             U.S. Government receipts............................................     4,697      3,027     -1,670      1,322        785        612        821        808        -13
          17         Compensation of employees...............................................     3,031      3,102         71        791        759        743        786        814         28

          18 Imports of goods and services and income payments...............................-1,778,117 -2,109,181   -331,064   -461,679   -486,803   -519,271   -533,828   -569,278    -35,450

          19     Imports of goods and services...............................................-1,517,011 -1,764,256   -247,245   -393,800   -415,459   -435,909   -445,953   -466,936    -20,983

          20         Goods, balance of payments basis........................................-1,260,674 -1,473,087   -212,413   -326,299   -345,376   -363,583   -372,028   -392,100    -20,072

          21         Services................................................................  -256,337   -291,169    -34,832    -67,501    -70,083    -72,326    -73,925    -74,836       -911
          22             Direct defense expenditures.........................................   -25,117    -28,238     -3,121     -6,817     -6,824     -7,143     -7,239     -7,032        207

          23             Travel..............................................................   -56,613    -64,590     -7,977    -15,102    -15,574    -16,351    -16,378    -16,287         91
          24             Passenger fares.....................................................   -20,957    -23,310     -2,353     -5,563     -5,608     -5,779     -5,900     -6,023       -123
          25             Other transportation................................................   -44,768    -54,173     -9,405    -11,551    -13,055    -13,056    -13,402    -14,660     -1,258

          26             Royalties and license fees..........................................   -20,049    -22,868     -2,819     -5,304     -5,225     -5,618     -6,318     -5,708        610
          27             Other private services..............................................   -85,829    -94,736     -8,907    -22,407    -23,013    -23,559    -23,854    -24,310       -456
          28             U.S. Government miscellaneous services..............................    -3,004     -3,254       -250       -757       -784       -820       -834       -816         18

          29     Income payments.............................................................  -261,106   -344,925    -83,819    -67,879    -71,344    -83,362    -87,875   -102,342    -14,467
          30         Income payments on foreign-owned assets in the United States............  -252,573   -336,064    -83,491    -65,713    -69,193    -81,088    -85,666   -100,115    -14,449
          31             Direct investment payments..........................................   -68,657   -105,252    -36,595    -18,289    -20,775    -26,735    -27,282    -30,458     -3,176
          32             Other private payments..............................................  -111,874   -146,674    -34,800    -29,099    -29,361    -33,853    -36,759    -46,701     -9,942
          33             U.S. Government payments............................................   -72,042    -84,138    -12,096    -18,325    -19,057    -20,500    -21,625    -22,956     -1,331
          34         Compensation of employees...............................................    -8,533     -8,861       -328     -2,166     -2,151     -2,274     -2,209     -2,227        -18

          35 Unilateral current transfers, net...............................................   -67,439    -72,928     -5,489    -17,617    -20,720    -18,332    -14,897    -18,983     -4,086
          36     U.S. Government grants......................................................   -21,865    -23,187     -1,322     -4,753     -7,744     -4,910     -4,876     -5,657       -781
          37     U.S. Government pensions and other transfers................................    -5,341     -6,235       -894     -1,352     -1,554     -1,556     -1,548     -1,578        -30
          38     Private remittances and other transfers.....................................   -40,233    -43,506     -3,273    -11,512    -11,422    -11,866     -8,473    -11,748     -3,275


                                                                                                                                                                                 March 16, 2005
    Table 1. U.S. International Transactions (Continued)
    [Millions of dollars, quarters seasonally adjusted]

                                                                                                                      Change:     2003     2004                                         Change:
                                          (Credits +, debits -)                                2003      2004p       2003-2004                                                           2004
                                                                                                                                  IV       Ir         IIr        IIIr       IVp         III-IV

                                      Capital and financial account

                                             Capital account

          39 Capital account transactions, net...............................................    -3,079     -1,477      1,602       -300       -396       -324       -374       -383         -9

                                            Financial account

          40 U.S.-owned assets abroad, net (increase/financial outflow (-))..................  -283,414   -817,676   -534,262    -61,647   -307,170   -106,472   -127,581   -276,453   -148,872

          41     U.S. official reserve assets, net...........................................     1,523      2,805      1,282      2,221        557      1,122        429        697        268
          42         Gold....................................................................      ....       ....       ....       ....       ....       ....       ....       ....       ....
          43         Special drawing rights..................................................       601       -398       -999        -97       -100        -90        -98       -110        -12
          44         Reserve position in the International Monetary Fund.....................     1,494      3,826      2,332      2,435        815      1,345        676        990        314
          45         Foreign currencies......................................................      -572       -623        -51       -117       -158       -133       -149       -183        -34

          46     U.S. Government assets, other than official reserve assets, net.............       537      1,269        732       -309        727         -2        -10        554        564
          47         U.S. credits and other long-term assets.................................    -7,279     -3,026      4,253     -1,728       -561       -668     -1,270       -527        743
          48         Repayments on U.S. credits and other long-term assets...................     7,981      4,245     -3,736      1,526      1,374        544      1,299      1,028       -271
          49         U.S. foreign currency holdings and U.S. short-term assets, net..........      -165         50        215       -107        -86        122        -39         53         92

          50     U.S. private assets, net....................................................  -285,474   -821,750   -536,276    -63,559   -308,454   -107,592   -128,000   -277,704   -149,704
          51         Direct investment.......................................................  -173,799   -248,508    -74,709    -53,705    -48,049    -55,919    -43,253   -101,287    -58,034
          52         Foreign securities......................................................   -72,337    -90,840    -18,503    -25,835    -16,524    -26,844    -20,290    -27,182     -6,892
          53         U.S. claims on unaffiliated foreigners reported by
                         U.S. nonbanking concerns............................................   -28,932   -128,589    -99,657    -31,090    -56,761     12,122     -9,447    -74,503    -65,056
          54         U.S. claims reported by U.S. banks, not included elsewhere..............   -10,406   -353,813   -343,407     47,071   -187,120    -36,951    -55,010    -74,732    -19,722

          55 Foreign-owned assets in the United States, net (increase/financial inflow (+))..   829,173  1,433,171    603,998    230,311    445,608    271,031    256,283    460,246    203,963

          56     Foreign official assets in the United States, net...........................   248,573    355,252    106,679     83,679    127,864     73,349     72,004     82,035     10,031
          57         U.S. Government securities..............................................   194,568    287,495     92,927     81,472    114,708     65,240     61,833     45,714    -16,119
          58             U.S. Treasury securities............................................   169,685    261,540     91,855     72,787    101,692     62,979     54,693     42,176    -12,517
          59             Other...............................................................    24,883     25,955      1,072      8,685     13,016      2,261      7,140      3,538     -3,602
          60         Other U.S. Government liabilities.......................................      -564       -314        250        -70       -140        -89        501       -586     -1,087
          61         U.S. liabilities reported by U.S. banks, not included elsewhere.........    49,420     55,442      6,022        524     11,854      6,189      6,354     31,045     24,691
          62         Other foreign official assets...........................................     5,149     12,629      7,480      1,753      1,442      2,009      3,316      5,862      2,546

          63     Other foreign assets in the United States, net..............................   580,600  1,077,919    497,319    146,632    317,744    197,682    184,279    378,211    193,932
          64         Direct investment.......................................................    39,890    115,530     75,640     10,719     10,485     32,854     35,861     36,327        466
          65         U.S. Treasury securities................................................   113,432    108,138     -5,294      4,714     65,438     29,684        908     12,108     11,200
          66         U.S. securities other than U.S. Treasury securities.....................   250,981    414,084    163,103     83,761     62,064     88,843     93,021    170,156     77,135
          67         U.S. currency...........................................................    16,640     14,827     -1,813      7,487     -1,800      8,754      2,560      5,313      2,753
          68         U.S. liabilities to unaffiliated foreigners reported by
                         U.S. nonbanking concerns............................................    84,014     87,113      3,099      4,140     40,723     -3,603     13,275     36,718     23,443
          69         U.S. liabilities reported by U.S. banks, not included elsewhere.........    75,643    338,227    262,584     35,811    140,834     41,150     38,654    117,589     78,935

          70 Statistical discrepancy (sum of above items with sign reversed).................   -12,012     51,922     63,934    -41,404      9,436        473     37,530      4,488    -33,042

             Memoranda:
          71 Balance on goods (lines 3 and 20)...............................................  -547,552   -665,477   -117,925   -139,441   -151,054   -163,866   -167,015   -183,542    -16,527
          72 Balance on services (lines 4 and 21)............................................    51,044     48,402     -2,642     13,947     12,215     12,544     11,151     12,491      1,340
          73 Balance on goods and services (lines 2 and 19)..................................  -496,508   -617,075   -120,567   -125,494   -138,839   -151,322   -155,864   -171,051    -15,187
          74 Balance on income (lines 12 and 29).............................................    33,279     24,063     -9,216     16,151     12,081      4,946      4,903      2,136     -2,767
          75 Unilateral current transfers, net (line 35).....................................   -67,439    -72,928     -5,489    -17,617    -20,720    -18,332    -14,897    -18,983     -4,086
          76 Balance on current account (lines 1, 18, and 35 or lines 73, 74, and 75)........  -530,668   -665,940   -135,272   -126,960   -147,478   -164,708   -165,858   -187,898    -22,040
    r Revised.  p Preliminary.

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