News Release

EMBARGOED UNTIL RELEASE AT 8:30 A.M. EST, Thursday, December 15, 2016
BEA 16-69

U.S. International Transactions, 3rd quarter 2016

                                    Current Account Balance

The U.S. current account deficit decreased to $113.0 billion (preliminary) in the third quarter
of 2016 from $118.3 billion (revised) in the second quarter of 2016, according to statistics
released by the Bureau of Economic Analysis (BEA).  The deficit decreased to 2.4 percent of
current-dollar gross domestic product (GDP) from 2.6 percent in the second quarter.

The $5.3 billion decrease in the current account deficit reflected a $9.0 billion decrease in the
deficit on goods that was partly offset by changes in the balances on secondary income, primary
income, and services.

                              Current Account Transactions (tables 1-5)

Exports of goods and services and income receipts

Exports of goods and services and income receipts increased $17.7 billion in the third quarter
to $799.0 billion.

   * Goods exports increased $15.7 billion to $375.9 billion, mostly reflecting increases in foods,
     feeds, and beverages, largely soybeans.  Exports of industrial supplies and materials,
     nonmonetary gold, and consumer goods except food and automotive (particularly in jewelry and
     collectibles) also increased.

   * Services exports increased $2.0 billion to $188.2 billion, mostly reflecting an increase in
     travel (for all purposes including education) that was partly offset by a decrease in transport.

Imports of goods and services and income payments

Imports of goods and services and income payments increased $12.4 billion to $912.0 billion.

   * Goods imports increased $6.7 billion to $553.6 billion, mostly reflecting an increase in
     imports of industrial supplies and materials, primarily petroleum and products, nonferrous
     metals, and iron and steel products.

   * Services imports increased $2.7 billion to $126.9 billion, mostly reflecting increases in
     charges for the use of intellectual property and travel (for all purposes including education).

   * Secondary income payments increased $2.0 billion to $72.0 billion, mostly reflecting an
     increase in U.S. government transfers, primarily U.S. government grants.

   * Primary income payments increased $1.0 billion to $159.4 billion, mostly reflecting an increase
     in portfolio investment income payments that was partly offset by a decrease in direct investment
     income payments.

                           Financial Account (tables 1, 6, 7, and 8)

Net U.S. borrowing measured by financial-account transactions was $207.9 billion in the third
quarter, an increase from net borrowing of $41.0 billion in the second quarter.  A decrease in
net U.S. acquisition of financial assets excluding financial derivatives was partly offset by a
decrease in net U.S. incurrence of liabilities excluding financial derivatives and an increase
in net lending in financial derivatives other than reserves.

Financial assets

Net U.S. acquisition of financial assets excluding financial derivatives decreased $292.0 billion
in the third quarter to $31.5 billion.

   * Transactions in portfolio investment assets shifted to net U.S. sales of $35.1 billion from
     net U.S. acquisition of $146.4 billion, mostly reflecting a shift to net sales of equity and
     investment fund shares from net acquisition in the second quarter.

   * Transactions in other investment assets shifted to net U.S. liquidation of $22.6 billion
     from net U.S. acquisition of $70.6 billion, largely reflecting increased net withdrawal of
     U.S. residents’ foreign holdings of currency and deposits.

   * Net U.S. acquisition of direct investment assets decreased $18.8 billion to $87.5 billion,
     reflecting decreases in net acquisitions of equity and debt instruments.

Liabilities

Net U.S. incurrence of liabilities excluding financial derivatives decreased $115.9 billion to
$251.5 billion.

   * Transactions in other investment liabilities shifted to net U.S. repayment of $64.5 billion
     from net U.S. incurrence of $181.4 billion, largely reflecting a shift in currency and deposits
     and loans to net U.S. repayment from net incurrence in the second quarter.

   * Net U.S. incurrence of direct investment liabilities decreased $87.1 billion to $86.9 billion,
     reflecting decreases in net U.S. incurrence of both equity and debt instrument liabilities.

   * Net U.S. incurrence of portfolio investment liabilities increased $217.2 billion to $229.1
     billion, partly offsetting the decreases in the other two major categories.  The increase
     largely reflected a shift to net foreign purchases of U.S. equity and investment fund shares
     from net foreign sales in the second quarter.

Financial derivatives

Transactions in financial derivatives other than reserves reflected third-quarter net lending of
$12.1 billion, a $9.2 billion increase from the second quarter.

                                Statistical Discrepancy (table 1)

The statistical discrepancy shifted to -$95.0 billion in the third quarter from $77.3 billion in
the second quarter.

                     Updates to International Transactions Accounts Statistics

           Updates to Second-Quarter 2016 International Transactions Accounts Aggregates
                              Billions of dollars, seasonally adjusted

                                                       Preliminary estimate    Revised estimate
Current-account balance                                       -119.9               -118.3
  Goods balance                                               -186.7               -186.7
  Services balance                                              61.5                 62.0
  Primary-income balance                                        42.9                 44.2
  Secondary-income balance                                     -37.6                -37.7
Net lending from financial-account transactions                -31.1                -41.0
Statistical discrepancy                                         88.8                 77.3

                       Next release:  March 21, 2017 at 8:30 A.M. EDT
                U.S. International Transactions, Fourth Quarter and Year 2016

                                    *          *          *

                    U.S. International Transactions Release Dates in 2017

                    Fourth Quarter and Year 2016                 March 21
                    First Quarter 2017 and Annual Update          June 20
                    Second Quarter 2017                      September 19
                    Third Quarter 2017                        December 19