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                          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 $132.8
billion (preliminary) in the fourth quarter of 2008, the smallest deficit since
the fourth quarter of 2003, from $181.3 billion (revised) in the third quarter
of 2008.  The decrease mostly resulted from a decrease in the deficit on goods.
An increase in the surplus on income and a decrease in net unilateral current
transfers to foreigners also contributed to the decrease in the current-account
deficit.  A decrease in the surplus on services was partly offsetting.

Goods and services

      The deficit on goods and services decreased to $140.4 billion in the
fourth quarter from $180.9 billion in the third.

      Goods

      The deficit on goods decreased to $174.1 billion in the fourth quarter
from $216.3 billion in the third.

      Goods exports decreased to $290.5 billion from $346.3 billion.  All major
commodity categories decreased substantially.  About half of the total decrease
was accounted for by a drop in industrial supplies and materials, mostly
resulting from declines in petroleum and products, in chemicals, and in metals
and nonmetallic products.  The next largest decreases were in capital goods, in
foods, feeds, and beverages, in automotive products, and in consumer goods.

      Goods imports decreased to $464.6 billion from $562.5 billion.  Nearly
all major commodity categories decreased substantially.  About half of the
total decrease was accounted for by a decline in petroleum and products.  The
next largest decreases were in nonpetroleum industrial supplies and materials,
in consumer goods, in capital goods, and in automotive products.

      Services

      The surplus on services decreased to $33.7 billion in the fourth quarter
from $35.4 billion in the third.

      Services receipts decreased to $132.5 billion from $139.6 billion.  The
decrease mostly resulted from declines in travel, in other transportation
(such as freight and port services), in passenger fares, and in other private
services (such as business, professional, and technical services, insurance
services, and financial services).

      Services payments decreased to $98.8 billion from $104.3 billion.  All
services categories decreased, but the largest decreases were in other
transportation and in royalties and license fees.

Income

      The surplus on income increased to $36.5 billion in the fourth quarter
from $29.6 billion in the third.

      Investment income

      Income receipts on U.S.-owned assets abroad decreased to $165.9 billion
from $191.6 billion.  The decrease resulted from decreases in direct investment
receipts and, to a lesser extent, in other private receipts (which consists
of interest and dividends).  U.S. government receipts (which consists of
interest) increased.

      Income payments on foreign-owned assets in the United States decreased to
$127.6 billion from $160.2 billion.  The decrease resulted from decreases in
direct investment payments and, to a lesser extent, 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 edged up to $0.8 billion
from $0.7 billion, and payments for compensation of foreign workers in the
United States edged up to $2.6 billion from $2.5 billion.

Unilateral current transfers

      Net unilateral current transfers to foreigners were $28.9 billion in the
fourth quarter, down from $30.0 billion in the third.  The decrease was more
than accounted for by a decrease in private remittances and other transfers.

                                Capital Account

      Net capital account payments (outflows) edged down to $0.6 billion in the
fourth quarter from $0.7 billion in the third.

                               Financial Account

      Net financial inflows were $76.8 billion in the fourth quarter, down from
$147.3 billion in the third.  The slowdown resulted from a shift from financial
inflows to financial outflows for foreign-owned assets in the United States
(a shift from an increase to a decrease in foreign-owned assets) that was only
partly offset by a pickup in financial inflows for U.S.-owned assets abroad
(a larger decrease in U.S.-owned assets).

U.S.-owned assets abroad

      U.S.-owned assets abroad decreased $84.4 billion in the fourth quarter,
following a decrease of $28.1 billion in the third.

      U.S. claims on foreigners reported by U.S. banks decreased $298.0 billion
in the fourth quarter, following a decrease of $134.4 billion in the third.

      Net U.S. sales of foreign securities were $77.0 billion in the fourth
quarter, down from $82.6 billion in the third.  Net U.S. sales of foreign
stocks were $39.7 billion, up from $14.8 billion.  Net U.S. sales of foreign
bonds were $37.3 billion, down from $67.8 billion.

      U.S. direct investment abroad increased $85.3 billion in the fourth
quarter, following an increase of $52.4 billion in the third.  The pickup
resulted from a larger increase in net equity capital investment abroad and a
smaller decrease in net intercompany debt investment abroad in the fourth
quarter than in the third.  In contrast, reinvested earnings slowed.

      U.S. claims on unaffiliated foreigners reported by U.S. nonbanking
concerns decreased $63.1 billion in the fourth quarter, following a decrease of
$89.5 billion in the third.

      U.S. official reserve assets increased $3.1 billion in the fourth
quarter, following an increase of $0.2 billion in the third.  The pickup
resulted from an increase in the U.S. reserve position in the International
Monetary Fund in the fourth quarter after a decrease in the third.

      U.S. government assets other than official reserve assets increased
$265.2 billion in the fourth quarter, following an increase of $226.0 billion
in the third.  The very large increases in both quarters resulted from drawings
on temporary reciprocal currency arrangements between the U.S. Federal Reserve
System and foreign central banks that do not meet the strict definition of U.S.
reserve assets.

Foreign-owned assets in the United States

      Foreign-owned assets in the United States decreased $7.6 billion in the
fourth quarter, following an increase of $123.3 billion in the third.

      U.S. liabilities to foreigners reported by U.S. banks decreased $35.1
billion in the fourth quarter, following a decrease of $124.7 billion in the
third.

      Net foreign purchases of U.S. Treasury securities were $89.5 billion in
the fourth quarter, up slightly from $89.1 billion in the third.

      Net foreign sales of U.S. securities other than U.S. Treasury securities
were $28.8 billion in the fourth quarter, down from $91.4 billion in the third.
Transactions in U.S. stocks shifted to net foreign sales of $3.6 billion from
net foreign purchases of $2.9 billion.  Net foreign sales U.S. corporate bonds
were $3.7 billion, down from $35.5 billion.  Net foreign sales of federally
sponsored agency bonds were $21.4 billion, down from $58.8 billion.

      Foreign direct investment in the United States increased $80.6 billion in
the fourth quarter, following an increase of $57.3 billion in the third.  The
pickup resulted from a substantial pickup in net equity capital investment in
the United States and, to a lesser extent, a smaller decrease in net
intercompany debt investment in the United States in the fourth quarter than in
the third quarter.  In contrast, reinvested earnings were negative in the
fourth quarter after having been positive in the third quarter.

      U.S. liabilities to unaffiliated foreigners reported by U.S. nonbanking
concerns decreased $130.1 billion in the fourth quarter, following an increase
of $71.1 billion in the third.

      Foreign official assets in the United States decreased $13.6 billion in
the fourth quarter, following an increase of $116.1 billion in the third.  The
shift mostly resulted from a decrease in U.S. liabilities reported by U.S.
banks in the fourth quarter after an increase in the third.

      Net U.S. currency shipments to foreigners were $29.9 billion in the
fourth quarter, up from $5.8 billion in the third.

      The statistical discrepancy--errors and omissions in recorded
transactions--was a positive $56.6 billion in the fourth quarter, compared with
a positive $34.7 billion in the third.

      In the fourth quarter, the U.S. dollar appreciated 11 percent on a trade-
weighted quarterly average basis against a group of 7 major currencies.

                                 The Year 2008

                                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 $673.3
billion (preliminary) in 2008 from $731.2 billion in 2007.  The decrease
resulted from increases in the surpluses on income and on services.  These
increases were partly offset by increases in net unilateral current transfers
to foreigners and in the deficit on goods.

Goods and services

      The deficit on goods and services decreased to $681.1 billion in 2008
from $700.3 billion in 2007.

      Goods

      The deficit on goods increased to $820.8 billion in 2008 from $819.4
billion in 2007.

      Goods exports increased to $1,291.4 billion from $1,148.5 billion.  About
half of the increase was accounted for by an increase in industrial supplies
and materials, mostly resulting from rises in petroleum and products, in metals
and nonmetallic products, and in chemicals.  The next largest increases were in
foods, feeds, and beverages, in capital goods, and in consumer goods.

      Goods imports increased to $2,112.2 billion from $1,967.9 billion.  More
than four-fifths of the increase was accounted for by an increase in petroleum
and products.  The next largest increases were in nonpetroleum industrial
supplies and materials, in capital goods, in foods, feeds, and beverages, and
in consumer goods.  These increases were partly offset by a decrease in
automotive products.

      Services

      The surplus on services increased to $139.7 billion in 2008 from $119.1
billion in 2007.

      Services receipts increased to $544.4 billion from $497.2 billion.  The
increase resulted from increases in nearly all services categories.  The
largest increases were in other private services (such as business,
professional, and technical services, insurance services, and financial
services), in travel, in other transportation (such as freight and port
services), in passenger fares, and in royalties and license fees.

      Services payments increased to $404.7 billion from $378.1 billion.  All
services categories increased, but the largest increases were in other
private services, in other transportation, in passenger fares, in travel, and
in direct defense expenditures.

Income

      The surplus on income increased to $127.6 billion in 2008 from $81.7
billion in 2007.

      Investment income

      Income receipts on U.S.-owned assets abroad decreased to $752.4 billion
from $814.8 billion.  The decrease was more than accounted for by a decrease in
other private receipts (which consists of interest and dividends).  Direct
investment receipts and U.S. government receipts (which consists of interest)
both increased.

      Income payments on foreign-owned assets in the United States decreased to
$617.6 billion from $726.0 billion.  The decrease resulted from decreases in
other private payments (which consists of interest and dividends) and in
direct investment payments.  U.S. government payments (which consists of
interest) increased.

      Compensation of employees

      Receipts for compensation of U.S. workers abroad were virtually unchanged
at $3.0 billion, and payments for compensation of foreign workers in the United
States increased slightly to $10.3 billion from $10.0 billion.

Unilateral current transfers

      Net unilateral current transfers to foreigners were $119.7 billion in
2008, up from $112.7 billion in 2007.  The increase was mostly accounted for by
an increase in private remittances and other transfers.

                                Capital Account

      Net capital account payments (outflows) were $2.6 billion in 2008, up
from $1.8 billion in 2007.

                               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 $546.6 billion in 2008, down from $774.3 billion in 2007.  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 $52.5 billion in 2008, following an
increase of $1,289.9 billion in 2007.

      U.S. claims on foreigners reported by U.S. banks decreased $425.0 billion
in 2008, following an increase of $644.8 billion in 2007.

      Transactions in foreign securities shifted to net U.S. sales of $91.0
billion in 2008 from net U.S. purchases of $288.7 billion in 2007.
Transactions in foreign stocks shifted to net U.S. sales of $6.3 billion from
net U.S. purchases of $118.0 billion.  Transactions in foreign bonds shifted to
net U.S. sales of $84.7 billion from net U.S. purchases of $170.7 billion.

      U.S. direct investment abroad increased $317.8 billion in 2008, following
an increase of $333.3 billion in 2007.  The slowdown resulted from slowdowns in
reinvested earnings and in net equity capital investment abroad.  In contrast,
net intercompany debt investment abroad decreased less in 2008 than in 2007.

      U.S. claims on unaffiliated foreigners reported by U.S. nonbanking
concerns decreased $283.8 billion in 2008, following an increase of $0.7 billion
in 2007.

      U.S. official reserve assets increased $4.8 billion in 2008, following an
increase of $0.1 billion in 2007.

      U.S. government assets other than official reserve assets increased
$529.5 billion in 2008, following an increase of $22.3 billion in 2007.  The
large increase in 2008 resulted from drawings on temporary reciprocal currency
arrangements between the U.S. Federal Reserve System and foreign central banks
that do not meet the strict definition of U.S. reserve assets.

Foreign-owned assets in the United States

      Foreign-owned assets in the United States increased $599.0 billion in
2008, following an increase of $2,057.7 billion in 2007.

      U.S. liabilities to foreigners reported by U.S. banks decreased $337.3
billion in 2008, following an increase of $532.8 billion in 2007.

      Net foreign purchases of U.S. Treasury securities were $307.6 billion in
2008, up from $156.8 billion in 2007.

      Transactions in U.S. securities other than U.S. Treasury securities
shifted to net foreign sales of $123.6 billion in 2008 from net foreign
purchases of $573.9 billion in 2007.  Net foreign purchases of U.S. stocks were
$6.9 billion, down from $182.4 billion.  Net foreign purchases of U.S.
corporate bonds were $0.6 billion, down from $372.1 billion.  Transactions in
federally sponsored agency bonds shifted to net foreign sales of $131.0 billion
from net foreign purchases of $19.4 billion.

      Foreign direct investment in the United States increased $325.3 billion
in 2008, following an increase of $237.5 billion in 2007.  The pickup resulted
from pickups in net equity capital investment in the United States and, to a
lesser extent, in net intercompany debt investment in the United States.  In
contrast, reinvested earnings slowed.

      U.S. liabilities to unaffiliated foreigners reported by U.S. nonbanking
concerns decreased $29.3 billion in 2008, following an increase of $156.3
billion in 2007.

      Foreign official assets in the United States increased $421.4 billion in
2008, following an increase of $411.1 billion in 2007.

      Transactions in U.S. currency shifted to net shipments from the United
States to foreign countries of $35.0 billion in 2008, following net shipments
from foreign countries to the United States of $10.7 billion in 2007.

      The statistical discrepancy--errors and omissions in recorded
transactions--was a positive $129.3 billion in 2008, compared with a negative
$41.3 billion in 2007.

      In 2008, the U.S. dollar depreciated 4 percent on a trade-weighted yearly
average basis against a group of 7 major currencies.

                                   Revisions

      The first three quarters of 2008 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 $181.3 billion from $174.1 billion.
The goods deficit was revised to $216.3 billion from $214.7 billion; the
services surplus was revised to $35.4 billion from $38.2 billion; the surplus
on income was revised to $29.6 billion from $30.8 billion; and net unilateral
current transfers to foreigners were revised to $30.0 billion from $28.4
billion.  Net financial inflows were revised to $147.3 billion from $135.2
billion.

                            *          *          *

      Release dates in 2009:

      Fourth quarter and year 2008...................March 18, 2009 (Wednesday)
      First quarter 2009..............................June 17, 2009 (Wednesday)
      Second quarter 2009........................September 16, 2009 (Wednesday)
      Third quarter 2009..........................December 16, 2009 (Wednesday)