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U.S. International Transactions: Fourth Quarter 2006
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Christopher Bach: (202) 606-9545 BEA 07-09
U.S. International Transactions: Fourth Quarter and Year 2006
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--decreased to
$195.8 billion (preliminary) in the fourth quarter of 2006 from $229.4 billion
(revised) in the third quarter. The decrease was mostly accounted for by a
decrease in the deficit on goods. In addition, the surplus on services
increased, the balance on income shifted to a surplus from a deficit, and net
unilateral current transfers to foreigners decreased.
Goods and services
The deficit on goods and services decreased to $178.6 billion in the
fourth quarter from $201.4 billion in the third.
Goods
The deficit on goods decreased to $197.9 billion in the fourth quarter
from $218.9 billion in the third.
Goods exports increased to $266.6 billion from $261.3 billion. The
increase was largely accounted for by an increase in capital goods, particularly
civilian aircraft. Consumer goods accounted for most of the remainder of the
increase in total exports.
Goods imports decreased to $464.6 billion from $480.2 billion. The
decrease was more than accounted for by a large decrease in petroleum and
products. Among nonpetroleum products, an increase in consumer goods was
partly offset by a decrease in nonpetroleum industrial supplies and materials.
Services
The surplus on services increased to $19.4 billion in the fourth quarter
from $17.5 billion in the third.
Services receipts increased to $106.8 billion from $103.7 billion. The
increase was largely accounted for by increases in other private services
(such as business, professional, and technical services, insurance services,
and financial services), in travel, and in royalties and license fees.
Services payments increased to $87.5 billion from $86.2 billion. The
increase was largely accounted for by an increase in other private services.
Income
The balance on income shifted to a surplus of $3.0 billion in the fourth
quarter from a deficit of $5.5 billion in the third.
Investment income
Income receipts on U.S.-owned assets abroad increased to $166.5 billion
from $158.1 billion. The increase was almost completely 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 decreased
to $161.9 billion from $162.0 billion. A decrease in direct investment payments
was virtually offset by increases in other private payments (which consists
of interest and dividends) and in U.S. Government payments (which consists of
interest).
Compensation of employees
Receipts for compensation of U.S. workers abroad were unchanged at
$0.7 billion, and payments for compensation of foreign workers in the United
States were nearly unchanged at $2.4 billion.
Unilateral current transfers
Net unilateral current transfers to foreigners were $20.2 billion in
the fourth quarter, down from $22.5 billion in the third. The decrease was
accounted for by decreases in private remittances and other transfers and in
U.S. Government grants.
Capital and Financial Account
Capital Account
Net capital account payments (outflows) were virtually unchanged at
$0.6 billion in the fourth quarter.
Financial Account
Net financial inflows--net acquisitions by foreign residents of assets
in the United States less net acquisitions by U.S. residents of assets
abroad--were $164.6 billion in the fourth quarter, down from $229.7 billion in
the third. Net acquisitions by foreign residents slowed, and net acquisitions
by U.S. residents picked up.
U.S.-owned assets abroad
U.S.-owned assets abroad increased $251.2 billion in the fourth quarter,
following an increase of $225.9 billion in the third.
U.S. claims on foreigners reported by U.S. banks increased $120.7 billion
in the fourth quarter, following an increase of $84.6 billion in the third.
Net U.S. purchases of foreign securities were a record $115.7 billion in
the fourth quarter, up from $54.4 billion in the third. Net U.S. purchases of
foreign stocks were $60.2 billion, up from $10.3 billion. Net U.S. purchases
of foreign bonds were $55.5 billion, up from $44.1 billion.
U.S. direct investment abroad increased $74.2 billion in the fourth
quarter, following an increase of $65.4 billion in the third. Pickups in net
equity capital investment abroad and in reinvested earnings were partly offset
by a shift from an increase to a decrease in net intercompany debt investment
abroad.
U.S. official reserve assets decreased $1.4 billion in the fourth
quarter, following a decrease of $1.0 billion in the third.
Foreign-owned assets in the United States
Foreign-owned assets in the United States increased $415.8 billion
in the fourth quarter, following an increase of $455.6 billion in the third.
U.S. liabilities to foreigners reported by U.S. banks increased $126.7
billion in the fourth quarter, following an increase of $86.0 billion in the third.
Transactions in U.S. Treasury securities shifted to net purchases by
foreigners of $29.7 billion in the fourth quarter from net sales by foreigners
of $4.9 billion in the third.
Net purchases by foreigners of U.S. securities other than U.S. Treasury
securities were $144.9 billion in the fourth quarter, down from $163.0 billion
in the third. Net purchases by foreigners of U.S. stocks were $26.4 billion,
down from $35.0 billion. Net purchases by foreigners of U.S. corporate bonds
were $115.7 billion, up from $99.8 billion. Net purchases by foreigners of
federally sponsored agency bonds were $2.9 billion, down from $28.1 billion.
Foreign direct investment in the United States increased $29.4 billion
in the fourth quarter, following an increase of $61.6 billion in the third. A
shift from an increase to a decrease in net intercompany debt investment in the
United States and a slowdown in reinvested earnings were partly offset by a
pickup in net equity capital investment in the United States.
Foreign official assets in the United States increased $70.5 billion in
the fourth quarter, following an increase of $78.4 billion in the third.
Net U.S. currency shipments to foreigners were $8.4 billion in the
fourth quarter, up from $1.1 billion in the third.
The statistical discrepancy--errors and omissions in recorded
transactions--was a positive $31.8 billion in the fourth quarter, compared with
a positive $0.2 billion in the third.
In the fourth quarter, the U.S. dollar was virtually unchanged on a
trade-weighted quarterly average basis against a group of 7 major currencies.
The Year 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
$856.7 billion (preliminary) in 2006 from $791.5 billion in 2005. The increase
was more than accounted for by an increase in the deficit on goods and a shift
from a surplus to a deficit on income. In contrast, the surplus on services
increased, and net unilateral current transfers to foreigners decreased.
Goods and services
The deficit on goods and services increased to $765.3 billion in 2006
from $716.7 billion in 2005.
Goods
The deficit on goods increased to $836.0 billion in 2006 from $782.7
billion in 2005.
Goods exports increased to $1,023.7 billion from $894.6 billion. The
increase was mostly accounted for by increases in capital goods and in
industrial supplies and materials.
Goods imports increased to $1,859.7 billion from $1,677.4 billion.
The largest increase was in petroleum and products. Capital goods, consumer
goods, and nonpetroleum industrial supplies and materials also contributed to
the increase in total imports.
Services
The surplus on services increased to $70.7 billion in 2006 from $66.0
billion in 2005.
Services receipts increased to $413.1 billion from $380.6 billion.
More than half of the increase was accounted for by an increase in other
private services (such as business, professional, and technical services,
insurance services, and financial services). The next largest increases were
in other transportation (such as freight and port services), in royalties
and license fees, and in travel.
Services payments increased to $342.4 billion from $314.6 billion. More
than half of the increase was accounted for by an increase in other private
services. All other services categories also increased.
Income
The balance on income shifted to a deficit of $7.3 billion in 2006
from a surplus of $11.3 billion in 2005.
Investment income
Income receipts on U.S.-owned assets abroad increased to $619.1 billion
from $471.7 billion. The increase was largely accounted for by an increase in
other private receipts (which consists of interest and dividends). Direct
investment receipts also increased.
Income payments on foreign-owned assets in the United States increased
to $619.9 billion from $454.1 billion. The increase was mostly accounted for
by an increase in other private payments (which consists of interest and
dividends). 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 unchanged at
$2.9 billion, and payments for compensation of foreign workers in the United
States increased to $9.4 billion from $9.2 billion.
Unilateral current transfers
Net unilateral current transfers to foreigners were $84.1 billion in
2006, down from $86.1 billion in 2005. A decrease in U.S. Government grants
was largely offset by an increase in private remittances and other transfers.
Capital and Financial Account
Capital Account
Net capital account payments (outflows) were $3.9 billion in 2006, down
from $4.4 billion in 2005.
Financial Account
Net financial inflows--net acquisitions by foreign residents of assets
in the United States less net acquisitions by U.S. residents of assets abroad--
were $719.1 billion in 2006, down from $785.4 billion in 2005. Net acquisitions
by U.S. residents strengthened more than net acquisitions by foreign residents.
U.S.-owned assets abroad
U.S.-owned assets abroad increased $1,045.8 billion in 2006, following
an increase of $426.8 billion in 2005.
U.S. claims on foreigners reported by U.S. banks increased $482.4
billion in 2006, following an increase of $213.0 billion in 2005.
Net U.S. purchases of foreign securities were a record $277.7 billion in
2006, up from $180.1 billion in 2005. Net U.S. purchases of foreign stocks were
$128.5 billion, down from $142.1 billion. Net U.S. purchases of foreign bonds
were a record $149.2 billion, up from $38.0 billion.
U.S. direct investment abroad increased $248.9 billion in 2006, following
an increase of $9.1 billion in 2005. The pickup was mostly accounted for by a
large shift from a decrease to an increase in reinvested earnings. (Reinvested
earnings were significantly affected in 2005 by tax incentives provided by the
American Jobs Creation Act of 2004.) Net intercompany debt investment abroad
decreased less in 2006 than in 2005, and net equity capital investment abroad
picked up.
U.S. official reserve assets decreased $2.4 billion in 2006, following
a decrease of $14.1 billion in 2005.
Foreign-owned assets in the United States
Foreign-owned assets in the United States increased $1,764.9 billion
in 2006, following an increase of $1,212.3 billion in 2005.
U.S. liabilities to foreigners reported by U.S. banks increased $441.2
billion in 2006, following an increase of $179.8 billion in 2005.
Net purchases by foreigners of U.S. Treasury securities were $29.4
billion in 2006, down from $199.5 billion in 2005.
Net purchases by foreigners of U.S. securities other than U.S. Treasury
securities were a record $621.2 billion in 2006, up from $474.1 billion in 2005.
Net purchases by foreigners of U.S. stocks were $114.0 billion, up from $85.8
billion. Net purchases by foreigners of U.S. corporate bonds were a record
$406.3 billion, up from $316.0 billion. Net purchases by foreigners of federally
sponsored agency bonds were $100.9 billion, up from $72.4 billion.
Foreign direct investment in the United States increased $183.6 billion
in 2006, following an increase of $109.8 billion in 2005. The pickup resulted
from a shift from a decrease to an increase in net intercompany debt investment
in the United States and pickups in reinvested earnings and in net equity
capital investment in the United States.
Foreign official assets in the United States increased $300.5 billion
in 2006, following an increase of $199.5 billion in 2005.
Net U.S. currency shipments to foreigners were $12.6 billion in 2006,
down from $19.4 billion in 2005.
The statistical discrepancy--errors and omissions in recorded
transactions--was a positive $141.4 billion in 2006, compared with a positive
$10.4 billion in 2005.
In 2006, the U.S. dollar depreciated 1 percent on a trade-weighted yearly
average basis against a group of 7 major currencies.
Revisions
The first three quarters of 2006 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 $229.4 billion from $225.6 billion.
The goods deficit was revised to $218.9 billion from $218.6 billion; the
services surplus was revised to $17.5 billion from $18.3 billion; the deficit
on income was revised to $5.5 billion from $3.8 billion; and net unilateral
current transfers to foreigners were revised to $22.5 billion from $21.5 billion.
Net financial inflows were revised to $229.7 billion from $176.4 billion.
* * *
Release dates in 2007:
Fourth quarter and year 2006.................March 14, 2007 (Wednesday)
First quarter 2007...............................June 15, 2007 (Friday)
Second quarter 2007.........................September 14, 2007 (Friday)
Third quarter 2007...........................December 17, 2007 (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.
March 14, 2007
Table 1. U.S. International Transactions
[Millions of dollars, quarters seasonally adjusted]
Change: 2005 2006 Change:
(Credits +, debits -) 2005 2006 p 2005-2006 2006
IV I r II r III r IV p III-IV
Current account
1 Exports of goods and services and income receipts............................ 1,749,892 2,058,836 308,944 462,357 483,338 510,923 523,832 540,741 16,909
2 Exports of goods and services............................................. 1,275,245 1,436,816 161,571 331,165 343,445 354,951 364,947 373,472 8,525
3 Goods, balance of payments basis...................................... 894,631 1,023,689 129,058 232,904 243,726 252,057 261,283 266,623 5,340
4 Services.............................................................. 380,614 413,127 32,513 98,261 99,719 102,894 103,664 106,849 3,185
5 Transfers under U.S. military agency sales contracts.............. 19,038 16,682 -2,356 4,446 4,453 4,226 4,022 3,982 -40
6 Travel............................................................ 81,680 85,697 4,017 20,374 20,774 21,475 21,334 22,114 780
7 Passenger fares................................................... 20,931 22,060 1,129 5,371 5,500 5,230 5,598 5,731 133
8 Other transportation.............................................. 42,245 48,208 5,963 11,244 11,572 12,185 12,206 12,245 39
9 Royalties and license fees........................................ 57,410 62,051 4,641 14,923 14,968 15,495 15,556 16,033 477
10 Other private services............................................ 158,223 177,284 19,061 41,643 42,175 43,997 44,654 46,457 1,803
11 U.S. Government miscellaneous services............................ 1,087 1,145 58 260 277 286 294 287 -7
12 Income receipts........................................................... 474,647 622,020 147,373 131,192 139,893 155,972 158,885 167,269 8,384
13 Income receipts on U.S.-owned assets abroad........................... 471,722 619,085 147,363 130,437 139,165 155,246 158,147 166,526 8,379
14 Direct investment receipts........................................ 251,370 295,884 44,514 67,481 68,676 74,868 74,075 78,264 4,189
15 Other private receipts............................................ 217,637 320,796 103,159 62,279 69,923 79,759 83,537 87,577 4,040
16 U.S. Government receipts.......................................... 2,715 2,405 -310 677 566 619 535 685 150
17 Compensation of employees............................................. 2,925 2,935 10 755 728 726 738 743 5
18 Imports of goods and services and income payments............................ -2,455,328 -2,831,369 -376,041 -659,290 -677,571 -706,776 -730,711 -716,311 14,400
19 Imports of goods and services............................................. -1,991,975 -2,202,083 -210,108 -525,939 -535,091 -548,584 -566,346 -552,063 14,283
20 Goods, balance of payments basis...................................... -1,677,371 -1,859,655 -182,284 -445,410 -451,974 -462,937 -480,175 -464,569 15,606
21 Services.............................................................. -314,604 -342,428 -27,824 -80,529 -83,117 -85,647 -86,171 -87,494 -1,323
22 Direct defense expenditures....................................... -30,062 -31,180 -1,118 -7,503 -7,692 -7,740 -8,002 -7,746 256
23 Travel............................................................ -69,175 -73,299 -4,124 -17,135 -17,662 -18,667 -18,409 -18,561 -152
24 Passenger fares................................................... -26,066 -27,306 -1,240 -6,644 -6,753 -6,952 -6,671 -6,930 -259
25 Other transportation.............................................. -62,107 -65,611 -3,504 -16,150 -16,196 -16,341 -16,605 -16,469 136
26 Royalties and license fees........................................ -24,501 -26,523 -2,022 -6,261 -6,764 -6,537 -6,551 -6,671 -120
27 Other private services............................................ -98,714 -114,485 -15,771 -25,845 -27,054 -28,394 -28,910 -30,127 -1,217
28 U.S. Government miscellaneous services............................ -3,979 -4,024 -45 -991 -996 -1,016 -1,022 -990 32
29 Income payments........................................................... -463,353 -629,286 -165,933 -133,351 -142,480 -158,192 -164,365 -164,248 117
30 Income payments on foreign-owned assets in the United States.......... -454,124 -619,862 -165,738 -131,018 -140,132 -155,845 -162,016 -161,868 148
31 Direct investment payments........................................ -116,953 -145,561 -28,608 -34,839 -34,443 -36,865 -39,828 -34,424 5,404
32 Other private payments............................................ -223,612 -329,231 -105,619 -64,857 -72,813 -82,539 -84,833 -89,046 -4,213
33 U.S. Government payments.......................................... -113,559 -145,070 -31,511 -31,322 -32,876 -36,441 -37,355 -38,398 -1,043
34 Compensation of employees............................................. -9,229 -9,424 -195 -2,333 -2,348 -2,347 -2,349 -2,380 -31
35 Unilateral current transfers, net............................................ -86,072 -84,122 1,950 -26,176 -19,545 -21,860 -22,498 -20,220 2,278
36 U.S. Government grants.................................................... -31,362 -21,410 9,952 -9,091 -4,631 -5,341 -6,040 -5,398 642
37 U.S. Government pensions and other transfers.............................. -6,303 -7,009 -706 -1,592 -1,742 -1,755 -1,749 -1,763 -14
38 Private remittances and other transfers................................... -48,407 -55,703 -7,296 -15,493 -13,172 -14,764 -14,709 -13,059 1,650
March 14, 2007
Table 1. U.S. International Transactions (Continued)
[Millions of dollars, quarters seasonally adjusted]
Change: 2005 2006 Change:
(Credits +, debits -) 2005 2006 p 2005-2006 2006
IV I r II r III r IV p III-IV
Capital and financial account
Capital account
39 Capital account transactions, net............................................ -4,351 -3,914 437 -514 -1,756 -1,003 -551 -604 -53
Financial account
40 U.S.-owned assets abroad, net (increase/financial outflow (-))............... -426,801 -1,045,760 -618,959 -10,656 -356,654 -211,969 -225,888 -251,249 -25,361
41 U.S. official reserve assets, net......................................... 14,096 2,374 -11,722 4,796 513 -560 1,006 1,415 409
42 Gold.................................................................. .... ..... .... .... .... .... .... .... ....
43 Special drawing rights................................................ 4,511 -223 -4,734 -81 -67 -51 -54 -51 3
44 Reserve position in the International Monetary Fund................... 10,200 3,331 -6,869 5,050 729 -351 1,275 1,678 403
45 Foreign currencies.................................................... -615 -734 -119 -173 -149 -158 -215 -212 3
46 U.S. Government assets, other than official reserve assets, net........... 5,539 5,219 -320 459 1,049 1,765 1,570 835 -735
47 U.S. credits and other long-term assets............................... -2,255 -2,990 -735 -509 -1,517 -376 -592 -505 87
48 Repayments on U.S. credits and other long-term assets................. 5,603 8,223 2,620 977 2,558 2,147 2,170 1,348 -822
49 U.S. foreign currency holdings and U.S. short-term assets, net........ 2,191 -14 -2,205 -9 8 -6 -8 -8 ....
50 U.S. private assets, net.................................................. -446,436 -1,053,353 -606,917 -15,911 -358,216 -213,174 -228,464 -253,499 -25,035
51 Direct investment..................................................... -9,072 -248,856 -239,784 25,799 -61,927 -47,363 -65,395 -74,171 -8,776
52 Foreign securities.................................................... -180,125 -277,691 -97,566 -47,266 -53,692 -53,915 -54,391 -115,693 -61,302
53 U.S. claims on unaffiliated foreigners reported by
U.S. nonbanking concerns.......................................... -44,221 -44,434 -213 -4,812 -46,190 -31,199 -24,096 57,051 81,147
54 U.S. claims reported by U.S. banks, not included elsewhere............ -213,018 -482,372 -269,354 10,368 -196,407 -80,697 -84,582 -120,686 -36,104
55 Foreign-owned assets in the United States, net (increase/financial inflow (+)) 1,212,250 1,764,909 552,659 253,350 527,923 365,543 455,598 415,845 -39,753
56 Foreign official assets in the United States, net......................... 199,495 300,510 101,015 71,934 75,697 75,869 78,434 70,510 -7,924
57 U.S. Government securities............................................ 156,450 243,794 87,344 61,204 66,219 21,553 77,978 78,044 66
58 U.S. Treasury securities.......................................... 71,749 118,344 46,595 37,418 42,156 -8,905 45,044 40,049 -4,995
59 Other............................................................. 84,701 125,450 40,749 23,786 24,063 30,458 32,934 37,995 5,061
60 Other U.S. Government liabilities..................................... -488 3,274 3,762 -255 37 724 1,153 1,360 207
61 U.S. liabilities reported by U.S. banks, not included elsewhere....... 24,275 19,550 -4,725 5,078 -821 42,241 -7,470 -14,400 -6,930
62 Other foreign official assets......................................... 19,258 33,892 14,634 5,907 10,262 11,351 6,773 5,506 -1,267
63 Other foreign assets in the United States, net............................ 1,012,755 1,464,399 451,644 181,416 452,226 289,674 377,164 345,335 -31,829
64 Direct investment..................................................... 109,754 183,571 73,817 26,510 45,693 46,810 61,633 29,435 -32,198
65 U.S. Treasury securities.............................................. 199,491 29,417 -170,074 62,041 -5,212 9,784 -4,899 29,744 34,643
66 U.S. securities other than U.S. Treasury securities................... 474,140 621,154 147,014 131,871 186,009 127,285 162,953 144,907 -18,046
67 U.S. currency......................................................... 19,416 12,570 -6,846 9,158 1,932 1,127 1,129 8,382 7,253
68 U.S. liabilities to unaffiliated foreigners reported by
U.S. nonbanking concerns.......................................... 30,105 176,509 146,404 -50,305 74,953 25,082 70,331 6,143 -64,188
69 U.S. liabilities reported by U.S. banks, not included elsewhere....... 179,849 441,178 261,329 2,141 148,851 79,586 86,017 126,724 40,707
70 Statistical discrepancy (sum of above items with sign reversed).............. 10,410 141,419 131,009 -19,071 44,265 65,142 218 31,798 31,580
Memoranda:
71 Balance on goods (lines 3 and 20)............................................ -782,740 -835,966 -53,226 -212,506 -208,248 -210,880 -218,892 -197,946 20,946
72 Balance on services (lines 4 and 21)......................................... 66,011 70,699 4,688 17,733 16,602 17,247 17,493 19,355 1,862
73 Balance on goods and services (lines 2 and 19)............................... -716,730 -765,267 -48,537 -194,774 -191,646 -193,633 -201,399 -178,591 22,808
74 Balance on income (lines 12 and 29).......................................... 11,293 -7,266 -18,559 -2,159 -2,587 -2,220 -5,480 3,021 8,501
75 Unilateral current transfers, net (line 35).................................. -86,072 -84,122 1,950 -26,176 -19,545 -21,860 -22,498 -20,220 2,278
76 Balance on current account (lines 1, 18, and 35 or lines 73, 74, and 75)..... -791,508 -856,655 -65,147 -223,109 -213,778 -217,713 -229,377 -195,790 33,587
r Revised
p Preliminary
NOTE: Details may not add to totals because of rounding. Source: U. S. Bureau of Economic Analysis