News Release
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U.S. International Transactions, 4th quarter and Year 2014
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William Zeile: | (202) 606-9893 | (Data) |
Christopher Gohrband: | (202) 606-9564 | (Revisions) |
Current Account The U.S. current-account deficita net measure of transactions between the United States and the rest of the world in goods, services, primary income (investment income and compensation), and secondary income (current transfers)increased to $113.5 billion (preliminary) in the fourth quarter of 2014 from $98.9 billion (revised) in the third quarter. The deficit increased to 2.6 percent of current-dollar gross domestic product (GDP) from 2.2 percent in the third quarter. The increase in the current-account deficit was primarily accounted for by a decrease in the surplus on primary income. In addition, the deficits on goods and secondary income increased. These changes were partly offset by an increase in the surplus on services. _______________________________________________________________________________________________ Notice About the 2015 Annual Revision of the U.S. International Transactions Accounts The annual revision of the U.S. international transactions accounts will be released along with preliminary estimates for the first quarter of 2015 on June 18, 2015. An article previewing the annual revisions will appear in the April 2015 issue of the Survey of Current Business. _______________________________________________________________________________________________ Goods and services The deficit on goods and services increased to $127.0 billion in the fourth quarter from $123.9 billion in the third quarter. Goods The deficit on goods increased to $185.2 billion in the fourth quarter from $181.1 billion in the third quarter. Goods exports decreased to $410.1 billion from $415.0 billion. Exports decreased in three of the six major general-merchandise end-use categories. The largest decrease was in industrial supplies and materials; exports also decreased in automotive vehicles, parts, and engines and in consumer goods except food and automotive. The decrease in industrial supplies and materialswhich more than accounted for the total decrease in general merchandise exports mostly reflected a decrease in exports of petroleum and products. The decrease in automotive vehicles, parts, and engines was more than accounted for by a decrease in exports of passenger cars. Exports increased in nonmonetary gold and in three major general-merchandise end-use categories. The largest general-merchandise increase was in foods, feeds, and beverages; the increase was more than accounted for by an increase in exports of soybeans, which was partly offset by a decrease in exports of grains and preparations (ITA Table 2.1). Goods imports decreased to $595.3 billion from $596.1 billion. Imports decreased in three of the six major general-merchandise end-use categories and in nonmonetary gold. The largest decreasewhich more than accounted for the total decrease in goods importswas in industrial supplies and materials; as with exports, the decrease mostly reflected a decrease in petroleum and products. The largest increase was in consumer goods except food and automotive, mostly reflecting an increase in other household goods, including cell phones (ITA Table 2.1). Services The surplus on services increased to $58.2 billion in the fourth quarter from $57.2 billion in the third quarter. Services exports increased to $180.4 billion from $176.6 billion. Exports increased in all nine major services categories. The largest increases were in financial services and in travel (for all purposes including education). The increase in financial services was largely due to increases in financial management, financial advisory, and custody services and in securities brokerage, underwriting, and related services. The increase in travel (for all purposes including education) reflected an increase in personal travel that was partly offset by a decrease in business travel (ITA Table 3.1). Services imports increased to $122.3 billion from $119.5 billion. Imports increased in seven of the nine major services categories. The largest increase was in travel (for all purposes including education), mainly reflecting an increase in business travel; personal travel also increased (ITA Table 3.1). Primary income The surplus on primary income decreased to $50.6 billion in the fourth quarter from $59.8 billion in the third quarter. Investment income Income receipts from foreigners on U.S. holdings of financial assets abroad decreased to $201.3 billion from $210.0 billion (ITA Table 4.1). The decrease was more than accounted for by a decrease in direct investment income on equity from foreign affiliates in all major industries (ITA Table 4.2). Income payments to foreigners on U.S. liabilities increased to $148.4 billion from $147.8 billion (ITA Table 4.1). The increase was more than accounted for by an increase in portfolio investment income payments, mainly due to increased interest on long-term debt securities (ITA Table 4.3). The increase in portfolio investment income payments was partly offset by a decrease in direct investment income payments, mostly reflecting a decrease in income on equity (ITA Table 4.2). Compensation of employees Receipts for compensation of U.S. residents paid by nonresidents was nearly unchanged at $1.7 billion in the fourth quarter. Payments for compensation of foreign residents paid by U.S. residents increased to $4.1 billion from $4.0 billion. Secondary income (current transfers) The deficit on secondary income increased to $37.0 billion in the fourth quarter from $34.8 billion in the third quarter. Secondary income receipts and payments include U.S. government and private transfers, such as U.S. government grants and pensions, fines and penalties, withholding taxes, personal transfers (remittances), insurance-related transfers, and other current transfers. Secondary income receipts decreased to $27.3 billion from $28.0 billion; the decrease was more than accounted for by a decrease in private transfers, primarily insurance-related transfers (ITA Table 5.1). Secondary income payments increased to $64.4 billion from $62.8 billion, mostly reflecting an increase in private transfers, primarily fines and penalties and withholding taxes (ITA Table 5.1). Capital Account Capital-account receipts for the fourth quarter were zero and capital-account payments are not available because source data are not yet available. Source data on fourth-quarter capital-account payments will be incorporated with the release of the 2015 first-quarter U.S. International Transactions on June 18, 2015. In the third quarter, capital-account receipts and payments were zero. Financial Account Net U.S. borrowing measured by financial-account transactions was $10.8 billion in the fourth quarter, down from $22.0 billion in the third quarter. Both net U.S. acquisition of financial assets excluding financial derivatives and net U.S. incurrence of liabilities excluding financial derivatives decreased in the fourth quarter, but the incurrence of liabilities decreased more. Net transactions in financial derivatives other than reserves reflected more net borrowing than in the third quarter. Net U.S. acquisition of financial assets excluding financial derivatives Net U.S. acquisition of financial assets excluding financial derivatives was $77.2 billion in the fourth quarter, down from $353.0 billion in the third quarter. Direct investment assets (equity and debt instruments) Net acquisition of direct investment assets was $128.3 billion in the fourth quarter, up from $96.8 billion in the third quarter. The increase was largely due to an increase in net acquisition of equity other than reinvestment of earnings. Also contributing to the increase was a shift to net acquisition of debt instrument assets by U.S. affiliates (ITA Table 6.1). Portfolio investment assets (equity and investment fund shares and debt securities) Net U.S. acquisition of portfolio investment assets abroad was $89.8 billion in the fourth quarter, down from $161.5 billion in the third quarter. Transactions in foreign debt securities shifted to net U.S. sales of $46.6 billion from net U.S. purchases of $33.5 billion, a shift largely accounted for by a shift to net sales of corporate bonds and notes. In contrast, net U.S. purchases of foreign equity and investment fund shares increased to $136.4 billion from $128.0 billion (ITA Table 7.1). Other investment assets (currency and deposits, loans, insurance technical reserves, and trade credit and advances) Net U.S. sales of other investment assets abroad (sales in excess of acquisitions) were $138.4 billion in the fourth quarter, a shift from net acquisition of $95.7 billion in the third quarter. The shift to net sales reflected shifts to net U.S. withdrawals of deposits abroad and net foreign repayment of U.S. loans to foreign residents (ITA Table 8.1). Reserve assets Transactions in U.S. reserve assets decreased holdings by $2.5 billion in the fourth quarter, after decreasing holdings by $0.9 billion in the third quarter. The decreases in both quarters reflected decreases in the U.S. reserve position in the International Monetary Fund. Net U.S. incurrence of liabilities excluding financial derivatives Net U.S. incurrence of liabilities to foreigners excluding financial derivatives was $56.2 billion in the fourth quarter, down from $350.7 billion in the third quarter. Direct investment liabilities (equity and debt instruments) Net incurrence of direct investment liabilities to foreigners was $49.7 billion in the fourth quarter, down from $86.4 billion in the third quarter. The decrease was largely accounted for by a shift to net repayment from net incurrence of debt instrument liabilities, reflecting a shift to net repayment by U.S. parent companies and a reduction in net incurrence by U.S. affiliates. Lower fourth-quarter net incurrence of liabilities in equity other than reinvestment of earnings also contributed to the decrease in the net incurrence of direct investment liabilities (ITA Table 6.1). Portfolio investment liabilities (equity and investment fund shares and debt securities) Net U.S. incurrence of portfolio investment liabilities to foreigners was $145.8 billion in the fourth quarter, down from $241.1 billion in the third quarter. Net foreign sales of U.S. equity and investment fund shares were $12.6 billion, a shift from net foreign purchases of $85.4 billion. Net foreign purchases of U.S. debt securities were $158.4 billion, up from $155.7 billion (ITA Table 7.1). Other investment liabilities (currency and deposits, loans, insurance technical reserves, trade credit and advances, and special drawing rights allocations) Net U.S. repayment (repayments in excess of incurrences) of other investment liabilities to foreigners was $139.3 billion in the fourth quarter, a shift from net incurrence of $23.2 billion in the third quarter. The shift reflected a shift to net withdrawals of foreign-resident deposits (ITA Table 8.1). Financial derivatives other than reserves Net transactions in financial derivatives other than reserves were $31.7 billion in the fourth quarter, representing net borrowing. This was an increase from net borrowing of $24.3 billion in the third quarter. The fourth-quarter increase reflected the appreciation of the dollar as over-the-counter and exchange-traded contracts written to hedge currency exposures resulted in higher net cash receipts to U.S. residents (net borrowing). Transactions in financial derivatives are only available as a net value equal to transactions for assets less transactions for liabilities. A positive value represents net cash payments by U.S. residents to foreign residents from settlements of derivatives contracts (net lending) and a negative value represents net U.S. cash receipts (net borrowing). Statistical discrepancy The statistical discrepancy is the difference between net acquisition of assets and net incurrence of liabilities in the financial account (including financial derivatives) less the difference between total credits and total debits recorded in the current and capital accounts. The statistical discrepancy was $102.7 billion in the fourth quarter compared with $76.9 billion in the third quarter. * * * In the fourth quarter, the U.S. dollar appreciated 6.2 percent on a trade-weighted quarterly average basis against a group of 7 major currencies, after appreciating 1.9 percent on the same basis in the third quarter. Exchange rate data are based on Federal Reserve Statistical Release H.10. * * * The Year 2014 Current Account The U.S. current-account deficit increased to $410.6 billion (preliminary) in 2014 from $400.3 billion in 2013. The deficit was 2.4 percent of current-dollar GDP in both 2014 and 2013. Goods and services The deficit on goods and services increased to $504.7 billion in 2014 from $476.4 billion in 2013. Goods The deficit on goods increased to $735.8 billion in 2014 from $701.7 billion in 2013. Goods exports increased to $1,635.1 billion from $1,592.8 billion. Exports increased in all six major general-merchandise end-use categories but decreased in nonmonetary gold. The largest increases were in capital goods except automotive, in consumer goods except food and automotive, and in industrial supplies and materials. The increase in capital goods except automotive reflected increases in machinery and equipment except consumer-type and in civilian aircraft, engines, and parts. The increase in consumer goods except food and automotive was largely accounted for by an increase in durable goods. The increase in industrial supplies and materials was mostly accounted for by an increase in exports of petroleum and products (ITA Table 2.1). Goods imports increased to $2,370.9 billion from $2,294.5 billion. Imports increased in five of the six major general-merchandise end-use categories. The largest increases were in capital goods except automotive and in consumer goods except food and automotive. The increase in capital goods except automotive was mostly accounted for by increases in machinery and equipment except consumer-type. The increase in consumer goods except food and automotive partly reflected increases in imports of medicinal, dental, and pharmaceutical products and in other household goods, including cell phones. Imports decreased in industrial supplies and materials, a decrease that was more than accounted for by a decrease in imports of petroleum and products (ITA Table 2.1). Services The surplus on services increased to $231.1 billion in 2014 from $225.3 billion in 2013. Services exports increased to $709.4 billion from $687.4 billion. Exports increased in seven of the nine major services categories. The largest increases were in other business servicesparticularly professional and management consulting services and research and development servicesand in financial services (ITA Table 3.1). Services imports increased to $478.3 billion from $462.1 billion. Imports increased in six of the nine major categories. The largest increase was in travel (for all purposes including education), specifically in personal travel. Increases in other business services and in transport also contributed to the increase in services imports (ITA Table 3.1). Primary income The surplus on primary income increased to $217.9 billion in 2014 from $199.7 billion in 2013. Investment income Income receipts from foreigners on U.S. holdings of financial assets abroad increased to $812.8 billion from $773.4 billion (ITA Table 4.1). The increase was largely accounted for by an increase in portfolio investment income, particularly income receipts on equity and investment fund shares by financial institutions other than deposit-taking institutions (ITA Table 4.3). Direct investment income receipts also increased, reflecting an increase in reinvested earnings (ITA Table 4.2). Income payments to foreigners on U.S. liabilities increased to $585.9 billion from $564.9 billion (ITA Table 4.1). The increase mostly reflected an increase in portfolio investment income payments, primarily on equity and investment fund shares of nonfinancial institutions (ITA Table 4.3). Direct investment income payments also increased. Other investment income payments decreased. Compensation of employees Receipts for compensation of U.S. residents paid by nonresidents increased to $6.9 billion from $6.7 billion. Payments for compensation of foreign residents paid by U.S. residents increased to $15.9 billion from $15.6 billion. Secondary income (current transfers) The deficit on secondary income increased to $123.8 billion in 2014 from $123.5 billion in 2013. Secondary income receipts increased to $127.1 billion from $118.4 billion; the increase was more than accounted for by an increase in U.S. government transfers, primarily fines and penalties (ITA Table 5.1). Secondary income payments increased to $250.9 billion from $241.9 billion; the increase was more than accounted for by an increase in private transfers, primarily insurance-related transfers and withholding taxes (ITA Table 5.1). Capital Account The capital-account deficit was $0.04 billion in 2014, down from $0.4 billion in 2013. Financial Account Net U.S. borrowing measured by financial-account transactions was $141.6 billion in 2014, down from $370.7 billion in 2013. Net U.S. acquisition of financial assets excluding financial derivatives increased in 2014, and net U.S. incurrence of liabilities excluding financial derivatives decreased. A shift to a negative value in net transactions in financial derivatives other than reserves partly offset the other two changes. Net U.S. acquisition of financial assets excluding financial derivatives Net U.S. acquisition of financial assets excluding financial derivatives was $820.5 billion in 2014, up from $644.8 billion in 2013. Direct investment assets (equity and debt instruments) Net acquisition of direct investment assets was $353.2 billion in 2014, down from $408.2 billion in 2013. The decrease was more than accounted for by a shift to net sales of debt instrument assets (ITA Table 6.1). Portfolio investment assets (equity and investment fund shares and debt securities) Net U.S. acquisition of portfolio investment assets abroad was $547.4 billion in 2014, up from $489.9 billion in 2013. Net U.S. purchases of foreign equity and investment fund shares increased to $437.1 billion from $275.2 billion. In contrast, net U.S. purchases of foreign debt securities decreased to $110.3 billion from $214.6 billion, reflecting lower net purchases of commercial paper and corporate bonds and notes (ITA Table 7.1). Other investment assets (currency and deposits, loans, insurance technical reserves, and trade credit and advances) Net U.S. sales of other investment assets abroad were $76.5 billion in 2014, down from net sales of $250.3 billion in 2013. The decrease was more than accounted for by a shift to net acquisition of loans (ITA Table 8.1). Reserve assets Transactions in U.S. reserve assets decreased holdings by $3.6 billion in 2014, after decreasing holdings by $3.1 billion in 2013. The decreases in both years were more than accounted for by decreases in the U.S. reserve position in the International Monetary Fund. Net U.S. incurrence of liabilities excluding financial derivatives Net U.S. incurrence of liabilities to foreigners excluding financial derivatives was $908.6 billion in 2014, down from $1,017.7 billion in 2013. Direct investment liabilities (equity and debt instruments) Net incurrence of direct investment liabilities to foreigners was $93.1 billion in 2014, down from $295.0 billion in 2013. The decrease was largely accounted for by a reduction in net incurrence of liabilities in equity other than reinvestment of earnings. A reduction in net incurrence of debt instrument liabilities also contributed to the decrease (ITA Table 6.1). Portfolio investment liabilities (equity and investment fund shares and debt securities) Net U.S. incurrence of portfolio investment liabilities to foreigners was $692.5 billion in 2014, up from $490.9 billion in 2013. Net foreign purchases of U.S. equity and investment fund shares were $169.9 billion, a shift from net foreign sales of $85.4 billion in 2013. Net foreign purchases of U.S. debt securities were $522.7 billion, down from $576.4 billion (ITA Table 7.1). Other investment liabilities (currency and deposits, loans, insurance technical reserves, trade credit and advances, and special drawing rights allocations) Net U.S. incurrence of other investment liabilities to foreigners was $123.0 billion in 2014, down from $231.8 billion in 2013. The decrease reflected a shift to net withdrawals of foreign-resident deposits (ITA Table 8.1). Financial derivatives other than reserves Net transactions in financial derivatives other than reserves were $53.5 billion in 2014, representing net borrowing. This was a shift from net lending of $2.2 billion in 2013. Transactions in financial derivatives are only available as a net value equal to transactions for assets less transactions for liabilities. A positive value represents net cash payments by U.S. residents to foreign residents from settlements of derivatives contracts (net lending) and a negative value represents net U.S. cash receipts (net borrowing). Statistical discrepancy The statistical discrepancy was $269.0 billion in 2014 compared with $30.0 billion in 2013. * * * In 2014, the U.S. dollar appreciated 3.3 percent on a trade-weighted yearly average basis against a group of 7 major currencies. In 2013, the U.S. dollar appreciated 3.3 percent on the same basis. From yearend 2013 to yearend 2014, the dollar appreciated 11.7 percent against the major currencies. Exchange rate data are based on Federal Reserve Statistical Release H.10. Revisions Statistics for the first three quarters of 2014 were revised to reflect revised seasonal adjustments and, for the third quarter, newly available and revised source data. For the third quarter, the current-account deficit is revised downward to $98.9 billion from $100.3 billion. The goods deficit is revised downward to $181.1 billion from $182.1 billion. The services surplus is revised downward to $57.2 billion from $57.7 billion. The primary income surplus is revised upward to $59.8 billion from $59.0 billion. The secondary income deficit is revised downward to $34.8 billion from $34.9 billion. Third-quarter net borrowing from financial-account transactions is revised downward to $22.0 billion from $22.5 billion. Net U.S. acquisition of financial assets excluding financial derivatives is revised downward to $353.0 billion from $358.2 billion, and net U.S. incurrence of liabilities excluding financial derivatives is revised downward to $350.7 billion from $356.4 billion. * * * Release dates in 2015: Fourth Quarter and Year 2014....................................March 19, 2015 (Thursday) First Quarter 2015 and Annual Revisions..........................June 18, 2015 (Thursday) Second Quarter 2015.........................................September 17, 2015 (Thursday) Third Quarter 2015...........................................December 17, 2015 (Thursday) * * * BEAs national, international, regional, and industry statistics; the SURVEY OF CURRENT BUSINESS; and BEA news releases are available without charge on BEAs Web site at www.bea.gov. At the site, you can also subscribe to receive free e-mail summaries of BEA releases and announcements. --------------- NOTE: This news release is available on BEA's Web site along with Highlights related to this release, the latest detailed statistics for U.S. international transactions, and a description of the estimation methods used to compile them. The fourth-quarter statistics in this release are preliminary and will be revised on June 18, 2015. All links in the text of this releaseincluding archived versions of this releaserefer to the latest available statistics.