The U.S. current-account  deficitthe combined balances on trade in goods and services,
income, and net unilateral current transfersdecreased to $110.3 billion (preliminary) in the
third quarter of 2011, from $124.7 billion (revised) in the second quarter.  More than half of
the decrease reflected a decrease in the deficit on goods.  A decrease in net unilateral current
transfers and increases in the surpluses on services and on income also contributed.

Goods and services

       The deficit on goods and services decreased to $135.6 billion in the third quarter from
$146.2 billion in the second.

       Goods
       The deficit on goods decreased to $181.8 billion in the third quarter from $190.6 billion
in the second.

       Goods exports increased to $382.7 billion from $373.0 billion.  Most major end-use categories
increased.  Most of the increase was accounted for by increases in industrial supplies and materials
and in capital goods.  The increase in industrial supplies and materials largely reflected increases
in nonmonetary gold and in petroleum and products.  The increase in capital goods was mostly due to
an increase in civilian aircraft (Table 2a).

       Goods imports increased slightly to $564.5 billion from $563.6 billion despite decreases in
most major end-use categories.  The increase in total imports reflected an increase in automotive
vehicles, parts, and engines that was mostly offset by decreases in industrial supplies and materials
and in consumer goods.  Most of the growth in automotive vehicles, parts, and engines was accounted
for by passenger cars, new and used.  Industrial supplies and materials decreased as a result of a
decrease in petroleum and products.  The decrease in consumer goods was primarily due to a reduction
in other household goods (Table 2a).

       Services
       The surplus on services increased to $46.2 billion in the third quarter from $44.4 billion in
the second.

       Services receipts increased to $153.8 billion from $150.8 billion.  All of the major services
categories increased; the increases were largest in passenger fares, in travel, in other private
services, and in royalties and license fees.

       Services payments increased to $107.6 billion from $106.4 billion.  The largest increases were
in other private services and in royalties and license fees.  Most of the other major services
categories also increased.

Income

       The surplus on income increased to $58.3 billion in the third quarter from $56.9 billion in
the second.

       Investment income
       Income receipts on U.S.-owned assets abroad decreased to $187.0 billion from $189.9 billion.
The decrease was more than accounted for by a decrease in direct investment receipts; an increase in
other private receipts (which consists of interest and dividends) was partly offsetting.

       Income payments on foreign-owned assets in the United States decreased to $126.5 billion from
$130.7 billion.  The decrease was more than accounted for by a decrease in direct investment payments;
an increase in other private payments (which consists of interest and dividends) was partly offsetting.

       Compensation of employees
       Receipts for compensation of U.S. workers abroad remained at $1.4 billion.  Payments for
compensation of foreign workers in the United States remained at $3.6 billion.

Unilateral current transfers

       Net unilateral current transfers to foreigners were $33.0 billion in the third quarter, down
from $35.4 billion in the second.  The decrease mostly reflected a decrease in U.S. government grants.

                                           Capital Account

       Net capital account flows were zero in the third quarter, compared with net payments of $0.8
billion in the second quarter.

                                          Financial Account

       Net financial inflows were $183.9 billion in the third quarter, up from $35.4 billion in the
second.  Both foreign-owned assets in the United States and U.S.-owned assets abroad increased;
foreign-owned assets in the United States increased substantially more than U.S.-owned assets abroad.
The third-quarter growth in U.S.-owned assets abroad was a reversal from a decrease in the second
quarter.

U.S.-owned assets abroad

       U.S.-owned assets abroad increased $70.8 billion in the third quarter, following a decrease of
$25.1 billion in the second.

       U.S. claims on foreigners reported by U.S. banks and securities brokers decreased $13.9 billion in
the third quarter, after a decrease of $194.7 billion in the second.  (Examples of these claims are U.S.
banks deposits at foreign banks and U.S. banks loans to foreigners.)  The third-quarter decrease reflected
a significant decrease in claims for customers accounts that was partly offset by a substantial increase in
claims for own accounts (Table 10a).

       U.S. net purchases of foreign securities were $27.6 billion in the third quarter, following net
purchases of $30.4 billion in the second.  Net purchases of foreign stocks slowed to $22.8 billion from $26.9
billion.  Net purchases of foreign bonds were $4.8 billion, up from $3.5 billion (Table 8a).

       U.S. direct investment abroad was $70.8 billion in the third quarter, down from $138.5 billion in the
second.  Most of the decrease was due to a decrease in equity investment and a shift to inflows of intercompany
debt investment.  A decrease in reinvested earnings also contributed (Table 7a).

       U.S. claims on unaffiliated foreigners reported by U.S. nonbanking concerns decreased $18.9 billion in
the third quarter, after a decrease of $7.1 billion in the second.

       U.S. official reserve assets increased $4.1 billion in the third quarter, following an increase of
$6.3 billion in the second.  The increase reflected an increase in the U.S. reserve position in the
International Monetary Fund (IMF) due to an increase in the U.S. loan to the IMF under New Arrangements to
Borrow.

       U.S. government assets other than official reserve assets increased $1.3 billion in the third quarter,
after an increase of $1.4 billion in the second.

Foreign-owned assets in the United States

       Foreign-owned assets in the United States increased $254.7 billion in the third quarter, following an
increase of $2.8 billion in the second.

       U.S. liabilities to foreigners reported by U.S. banks and securities brokers (other than foreign
official assets) increased $63.7 billion in the third quarter, after a decrease of $112.6 billion in the
second.  (Examples of these liabilities are deposits of foreign residents at banks in the United States and
loans by banks abroad to banks in the United States.)  The increase resulted from an increase in liabilities
for own accounts; a large increase in deposits abroad was partly offset by decreases in repurchase agreements
and other liabilities (Table 11a).

       Foreign private net purchases of U.S. Treasury securities were $123.8 billion in the third quarter, a
shift from net sales of $59.3 billion in the second.

       Foreign private net sales of U.S. securities other than U.S. Treasury securities were $23.0 billion in
the third quarter, up from net sales of $10.7 billion in the second.  The third-quarter increase was due to a
shift to net sales of U.S. stocks of $27.1 billion from net purchases of $27.6 billion.  Partly offsetting were
a shift to net purchases of U.S. federally sponsored agency bonds from net sales and a decrease in net sales of
corporate bonds.  Net purchases of U.S. federally sponsored agency bonds were $13.0 billion in the third quarter,
a shift from net sales of $23.4 billion in the second.  Net sales of U.S. corporate bonds were $8.9 billion,
down from $15.0 billion (Table 8a).

       Foreign direct investment in the United States was $75.3 billion in the third quarter, following
investment of $52.1 billion in the second.  The increase was accounted for by a shift to inflows of
intercompany debt investment, and a slight increase in equity investment.  Reinvested earnings edged slightly
lower (Table 7a).

       U.S. liabilities to unaffiliated foreigners reported by U.S. nonbanking concerns decreased $19.0 billion
in the third quarter, following an increase of $24.2 billion in the second.

       Foreign official assets in the United States increased $24.4 billion in the third quarter, after an
increase of $95.1 billion in the second.  The increase was due to net purchases of U.S. Treasury securities,
particularly by European countries.

       Net shipments of U.S. currency to foreign countries were $9.6 billion in the third quarter, down from
$14.0 billion in the second.

       The statistical discrepancynet errors and omissions in recorded transactionswas -$73.6 billion in the
third quarter compared with $90.2 billion in the second.

       In the third quarter, the U.S. dollar appreciated 0.3 percent on a trade-weighted quarterly average basis
against a group of 7 major currencies.  (Data are based on Federal Reserve Statistical Release H.10.)


                                                 Revisions

       The second-quarter 2011 international transactions are revised from previously published statistics.
The current-account deficit was revised up to $124.7 billion from $118.0 billion.  The goods deficit was revised
up to $190.6 billion from $190.4 billion; the services surplus was revised down to $44.4 billion from $45.4
billion; the income surplus was revised down to $56.9 billion from $61.1 billion; and net outflows of unilateral
current transfers were revised up to $35.4 billion from $34.2 billion.  Net financial inflows were revised up to
$35.4 billion from $25.7 billion.

                                          *          *          *

       Release dates in 2012:

       Fourth quarter and year 2011...................................................March 14, 2012 (Wednesday)
       First quarter 2012...............................................................June 14, 2012 (Thursday)
       Second quarter 2012..........................................................September 18, 2012 (Tuesday)
       Third quarter 2012............................................................December 18, 2012 (Tuesday)

                                          *          *          *

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