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U.S. International Transactions: Second Quarter 2006
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Douglas B. Weinberg: (202) 606-9590 BEA 06-40 U.S. International Transactions: Second Quarter 2006 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 $218.4 billion (preliminary) in the second quarter of 2006 from $213.2 billion (revised) in the first quarter. The increase was mostly accounted for by increases in the deficits on goods and on income. Net unilateral current transfers to foreigners also increased, and the surplus on services was virtually unchanged. Goods and services The deficit on goods and services increased to $193.8 billion in the second quarter from $191.1 billion in the first. Goods The deficit on goods increased to $210.6 billion in the second quarter from $208.0 billion in the first. Goods exports increased to $252.8 billion from $244.5 billion. The increase was largely accounted for by increases in industrial supplies and materials and in capital goods. Goods imports increased to $463.4 billion from $452.5 billion. The increase was largely accounted for by an increase in petroleum and products. The largest increases in nonpetroleum products were in capital goods and in consumer goods. Services The surplus on services was virtually unchanged at $16.8 billion in the second quarter. Services receipts increased to $103.0 billion from $99.9 billion. The largest increases were in other private services (such as business, professional, and technical services, insurance services, and financial services), in travel, in royalties and license fees, and in other transportation (such as freight and port services). Services payments increased to $86.3 billion from $83.1 billion. The largest increases were in other private services, in travel, and in passenger fares. Income The deficit on income increased to $4.1 billion in the second quarter from $2.5 billion in the first. Investment income Income receipts on U.S.-owned assets abroad increased to $153.5 billion from $139.2 billion. Other private receipts (which consists of interest and dividends) increased strongly, and direct investment receipts also increased. Income payments on foreign-owned assets in the United States increased to $156.0 billion from $140.1 billion. Other private payments (which consists of interest and dividends) increased strongly, and U.S. Government payments (which consists of interest) and direct investment payments also increased. Compensation of employees Receipts for compensation of U.S. workers abroad were virtually unchanged at $0.7 billion, and payments for compensation of foreign workers in the United States were virtually unchanged at $2.3 billion. Unilateral current transfers Net unilateral current transfers to foreigners were $20.4 billion in the second quarter, up from $19.5 billion in the first. The increase was accounted for by increases in private remittances and other transfers and in U.S. Government grants. Capital and Financial Account Capital Account Capital account transactions were net outflows (payments) of $0.9 billion in the second quarter, down from net outflows of $1.8 billion in the first. 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 $154.1 billion in the second quarter, down from $171.5 billion in the first. Net acquisitions by foreign residents slowed more than net acquisitions by U.S. residents. U.S.-owned assets abroad U.S.-owned assets abroad increased $212.3 billion in the second quarter, following an increase of $356.0 billion in the first. U.S. claims on foreigners reported by U.S. banks increased $81.5 billion in the second quarter, following an increase of $196.4 billion in the first. Net U.S. purchases of foreign securities were $52.2 billion in the second quarter, down from $53.7 billion in the first. Net U.S. purchases of foreign stocks were $17.4 billion, down from $41.1 billion. Net U.S. purchases of foreign bonds were $34.8 billion, up from $12.6 billion. U.S. direct investment abroad increased $47.1 billion in the second quarter, following an increase of $61.3 billion in the first. A shift to a decrease in net intercompany debt investment abroad from an increase and a slowdown in net equity capital investment abroad were partly offset by a pickup in reinvested earnings. U.S. official reserve assets increased $0.6 billion in the second quarter, following a decrease of $0.5 billion in the first. Foreign-owned assets in the United States Foreign-owned assets in the United States increased $366.4 billion in the second quarter, following an increase of $527.5 billion in the first. U.S. liabilities to foreigners reported by U.S. banks increased $84.2 billion in the second quarter, following an increase of $148.9 billion in the first. Transactions in U.S. Treasury securities shifted to net foreign purchases of $10.1 billion in the second quarter from net foreign sales of $5.2 billion in the first. Net foreign purchases of U.S. securities other than U.S. Treasury securities were $121.6 billion in the second quarter, down from $186.0 billion in the first. Transactions in U.S. stocks shifted to net foreign sales of $1.6 billion from net foreign purchases of $54.0 billion. Net foreign purchases of U.S. corporate bonds were a record $95.2 billion, up from $90.1 billion. Net foreign purchases of federally sponsored agency bonds were $28.0 billion, down from $41.9 billion. Foreign direct investment in the United States increased $48.4 billion in the second quarter, following an increase of $45.3 billion in the first. A shift to an increase in net intercompany debt investment in the United States from a decrease and a pickup in reinvested earnings were partly offset by a slowdown in net equity capital investment in the United States. Foreign official assets in the United States increased $74.9 billion in the second quarter, following an increase of $75.7 billion in the first. Net U.S. currency shipments to foreigners were $1.1 billion in the second quarter, down from $1.9 billion in the first. The statistical discrepancy--errors and omissions in recorded transactions--was a positive $65.2 billion in the second quarter, compared with a positive $43.4 billion in the first. In the second quarter, the U.S. dollar depreciated 3 percent on a trade- weighted quarterly average basis against a group of 7 major currencies. Revisions The first-quarter international transactions are revised from previously published estimates. The current-account deficit was revised to $213.2 billion from $208.7 billion. The goods deficit was unrevised at $208.0 billion; the services surplus was revised to $16.8 billion from $17.2 billion; the balance on income was revised to a deficit of $2.5 billion from a surplus of $1.9 billion; and unilateral current transfers were revised to net outflows of $19.5 billion from $19.9 billion. Net recorded financial inflows were revised to $171.5 billion from $157.6 billion. * * * Release dates in 2006: Fourth quarter and year 2005..................March 14, 2006 (Tuesday) First quarter 2006..............................June 16, 2006 (Friday) Second quarter 2006........................September 18, 2006 (Monday) Third quarter 2006..........................December 18, 2006 (Monday) * * * 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 BEAs national, international, regional, and industry estimates; the Survey of Current Business; and BEA news releases are available without charge on BEAs 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. September 18, 2006 Table 1. U.S. International Transactions [Millions of dollars, quarters seasonally adjusted] 2005 2006 Change: (Credits +, debits -) 2005 2006 I II III IV I r II p I-II Current account 1 Exports of goods and services and income receipts................................ 1,749,892 415,277 429,326 442,935 462,357 484,396 510,062 25,666 2 Exports of goods and services................................................. 1,275,245 306,580 316,645 320,853 331,165 344,430 355,879 11,449 3 Goods, balance of payments basis.......................................... 894,631 214,189 222,591 224,947 232,904 244,512 252,843 8,331 4 Services.................................................................. 380,614 92,391 94,054 95,906 98,261 99,918 103,036 3,118 5 Transfers under U.S. military agency sales contracts.................. 19,038 4,679 4,675 5,239 4,446 4,453 4,269 -184 6 Travel................................................................ 81,680 19,983 20,934 20,389 20,374 20,742 21,697 955 7 Passenger fares....................................................... 20,931 4,890 5,161 5,508 5,371 5,545 5,376 -169 8 Other transportation.................................................. 42,245 10,103 10,353 10,545 11,244 11,588 12,122 534 9 Royalties and license fees............................................ 57,410 14,146 13,943 14,397 14,923 15,040 15,601 561 10 Other private services................................................ 158,223 38,316 38,726 39,538 41,643 42,273 43,690 1,417 11 U.S. Government miscellaneous services................................ 1,087 274 262 291 260 277 281 4 12 Income receipts............................................................... 474,647 108,697 112,681 122,081 131,192 139,966 154,183 14,217 13 Income receipts on U.S.-owned assets abroad............................... 471,722 107,988 111,952 121,350 130,437 139,238 153,457 14,219 14 Direct investment receipts............................................ 251,370 58,846 60,572 64,476 67,481 68,738 72,911 4,173 15 Other private receipts................................................ 217,637 48,437 50,674 56,247 62,279 69,923 79,831 9,908 16 U.S. Government receipts.............................................. 2,715 705 706 627 677 577 715 138 17 Compensation of employees................................................. 2,925 709 729 731 755 728 726 -2 18 Imports of goods and services and income payments................................ -2,455,328 -579,764 -599,390 -616,886 -659,290 -678,052 -708,028 -29,976 19 Imports of goods and services................................................. -1,991,975 -474,688 -488,703 -502,645 -525,939 -535,570 -549,696 -14,126 20 Goods, balance of payments basis.......................................... -1,677,371 -397,457 -410,811 -423,693 -445,410 -452,481 -463,441 -10,960 21 Services.................................................................. -314,604 -77,231 -77,892 -78,952 -80,529 -83,089 -86,255 -3,166 22 Direct defense expenditures........................................... -30,062 -7,542 -7,478 -7,539 -7,503 -7,692 -7,858 -166 23 Travel................................................................ -69,175 -17,270 -17,589 -17,181 -17,135 -17,634 -18,658 -1,024 24 Passenger fares....................................................... -26,066 -6,213 -6,555 -6,654 -6,644 -6,749 -7,266 -517 25 Other transportation.................................................. -62,107 -15,617 -15,135 -15,205 -16,150 -16,232 -16,390 -158 26 Royalties and license fees............................................ -24,501 -5,880 -6,004 -6,356 -6,261 -6,741 -6,760 -19 27 Other private services................................................ -98,714 -23,699 -24,169 -25,001 -25,845 -27,045 -28,309 -1,264 28 U.S. Government miscellaneous services................................ -3,979 -1,010 -962 -1,016 -991 -996 -1,014 -18 29 Income payments............................................................... -463,353 -105,076 -110,687 -114,240 -133,351 -142,482 -158,332 -15,850 30 Income payments on foreign-owned assets in the United States.............. -454,124 -102,817 -108,403 -111,887 -131,018 -140,132 -155,983 -15,851 31 Direct investment payments............................................ -116,953 -28,490 -29,520 -24,105 -34,839 -34,443 -36,889 -2,446 32 Other private payments................................................ -223,612 -48,786 -51,490 -58,479 -64,857 -72,813 -82,827 -10,014 33 U.S. Government payments.............................................. -113,559 -25,541 -27,393 -29,303 -31,322 -32,876 -36,267 -3,391 34 Compensation of employees................................................. -9,229 -2,259 -2,284 -2,353 -2,333 -2,350 -2,349 1 35 Unilateral current transfers, net................................................ -86,072 -27,237 -23,194 -9,464 -26,176 -19,542 -20,444 -902 36 U.S. Government grants........................................................ -31,362 -9,221 -5,780 -7,270 -9,091 -4,631 -4,940 -309 37 U.S. Government pensions and other transfers.................................. -6,303 -1,558 -1,569 -1,584 -1,592 -1,742 -1,753 -11 38 Private remittances and other transfers....................................... -48,407 -16,458 -15,845 -610 -15,493 -13,169 -13,751 -582 September 18, 2006 Table 1. U.S. International Transactions (Continued) [Millions of dollars, quarters seasonally adjusted] 2005 2006 Change: (Credits +, debits -) 2005 2006 I II III IV I r II p I-II Capital and financial account Capital account 39 Capital account transactions, net................................................ -4,351 -2,691 -589 -557 -514 -1,756 -882 874 Financial account 40 U.S.-owned assets abroad, net (increase/financial outflow (-))................... -426,801 -87,391 -196,376 -132,380 -10,656 -355,978 -212,339 143,639 41 U.S. official reserve assets, net............................................. 14,096 5,331 -797 4,766 4,796 513 -560 -1,073 42 Gold...................................................................... .... .... .... .... .... .... .... .... 43 Special drawing rights.................................................... 4,511 1,713 -97 2,976 -81 -67 -51 16 44 Reserve position in the International Monetary Fund....................... 10,200 3,763 -564 1,951 5,050 729 -351 -1,080 45 Foreign currencies........................................................ -615 -145 -136 -161 -173 -149 -158 -9 46 U.S. Government assets, other than official reserve assets, net............... 5,539 2,591 989 1,501 459 1,049 1,479 430 47 U.S. credits and other long-term assets................................... -2,255 -519 -708 -518 -509 -1,517 -373 1,144 48 Repayments on U.S. credits and other long-term assets..................... 5,603 1,083 1,586 1,957 977 2,558 1,861 -697 49 U.S. foreign currency holdings and U.S. short-term assets, net............ 2,191 2,027 111 62 -9 8 -9 -17 50 U.S. private assets, net...................................................... -446,436 -95,313 -196,568 -138,647 -15,911 -357,540 -213,258 144,282 51 Direct investment......................................................... -9,072 -31,259 -33,957 30,342 25,799 -61,251 -47,102 14,149 52 Foreign securities........................................................ -180,125 -50,367 -45,702 -36,790 -47,266 -53,692 -52,215 1,477 53 U.S. claims on unaffiliated foreigners reported by U.S. nonbanking concerns.............................................. -44,221 -67,170 57,244 -29,483 -4,812 -46,190 -32,408 13,782 54 U.S. claims reported by U.S. banks, not included elsewhere................ -213,018 53,483 -174,153 -102,716 10,368 -196,407 -81,533 114,874 55 Foreign-owned assets in the United States, net (increase/financial inflow (+))... 1,212,250 224,128 346,179 388,592 253,350 527,498 366,397 -161,101 56 Foreign official assets in the United States, net............................. 199,495 18,965 74,613 33,983 71,934 75,697 74,874 -823 57 U.S. Government securities................................................ 156,450 33,007 36,313 25,926 61,204 66,219 21,553 -44,666 58 U.S. Treasury securities.............................................. 71,749 9,226 16,892 8,213 37,418 42,156 -8,905 -51,061 59 Other................................................................. 84,701 23,781 19,421 17,713 23,786 24,063 30,458 6,395 60 Other U.S. Government liabilities......................................... -488 -740 112 395 -255 37 637 600 61 U.S. liabilities reported by U.S. banks, not included elsewhere........... 24,275 -15,814 34,187 824 5,078 -821 41,730 42,551 62 Other foreign official assets............................................. 19,258 2,512 4,001 6,838 5,907 10,262 10,954 692 63 Other foreign assets in the United States, net................................ 1,012,755 205,163 271,566 354,609 181,416 451,801 291,523 -160,278 64 Direct investment......................................................... 109,754 30,539 8,245 44,459 26,510 45,268 48,413 3,145 65 U.S. Treasury securities.................................................. 199,491 86,108 14,103 37,239 62,041 -5,212 10,065 15,277 66 U.S. securities other than U.S. Treasury securities....................... 474,140 77,412 111,808 153,049 131,871 186,009 121,556 -64,453 67 U.S. currency............................................................. 19,416 1,072 4,507 4,679 9,158 1,932 1,127 -805 68 U.S. liabilities to unaffiliated foreigners reported by U.S. nonbanking concerns.............................................. 30,105 80,174 -20,035 20,271 -50,305 74,953 26,115 -48,838 69 U.S. liabilities reported by U.S. banks, not included elsewhere........... 179,849 -70,142 152,938 94,912 2,141 148,851 84,247 -64,604 70 Statistical discrepancy (sum of above items with sign reversed).................. 10,410 57,678 44,044 -72,240 -19,071 43,434 65,234 21,800 Memoranda: 71 Balance on goods (lines 3 and 20)................................................ -782,740 -183,268 -188,220 -198,746 -212,506 -207,969 -210,598 -2,629 72 Balance on services (lines 4 and 21)............................................. 66,011 15,160 16,162 16,954 17,733 16,829 16,781 -48 73 Balance on goods and services (lines 2 and 19)................................... -716,730 -168,108 -172,058 -181,792 -194,774 -191,140 -193,817 -2,677 74 Balance on income (lines 12 and 29).............................................. 11,293 3,621 1,994 7,841 -2,159 -2,516 -4,149 -1,633 75 Unilateral current transfers, net (line 35)...................................... -86,072 -27,237 -23,194 -9,464 -26,176 -19,542 -20,444 -902 76 Balance on current account (lines 1, 18, and 35 or lines 73, 74, and 75)......... -791,508 -191,724 -193,258 -183,415 -223,109 -213,198 -218,410 -5,212 r Revised p Preliminary NOTE: Details may not add to totals because of rounding. Source: U. S. Bureau of Economic Analysis