ERRATA Tables 1 and 7 and relevant text in the "U.S. International Transactions: First Quarter 2017 and Annual Update" news release and corresponding statistics in the Interactive Tables were corrected on July 5, 2017. The corrections affect statistics for net U.S. incurrence of portfolio investment long-term debt liabilities and related aggregate statistics for the first quarter of 2017; related statistics for U.S. portfolio investment interest payments were not updated at this time because they were not significantly affected. Related position statistics were also corrected; see the "U.S. Net International Investment Position: First Quarter 2017, Year 2016, and Annual Update" news release.

                                    Current-Account Balance

The U.S. current-account deficit increased to $116.8 billion (preliminary) in the first quarter
of 2017 from $114.0 billion (revised) in the fourth quarter of 2016, according to statistics
released by the Bureau of Economic Analysis (BEA). The deficit increased to 2.5 percent of current-
dollar gross domestic product (GDP) from 2.4 percent in the fourth quarter.

The $2.8 billion increase in the current-account deficit reflected a $5.3 billion increase in the
deficit on goods and a $3.6 billion decrease in the surplus on primary income that were partly
offset by a $5.8 billion decrease in the deficit on secondary income and a $0.3 billion increase
in the surplus on services.

The remainder of this release highlights changes in major aggregates of the U.S. international
transactions accounts and selected component contributions to those changes from the fourth
quarter of 2016 to the first quarter of 2017, and highlights updates to previously published
statistics.

                           Current-Account Transactions (tables 1-5)

Exports of goods and services and income receipts

Exports of goods and services and income receipts increased $22.5 billion in the first quarter
to $830.3 billion.

   * Goods exports increased $13.2 billion to $383.7 billion, mostly reflecting increases in
     exports of industrial supplies and materials, largely petroleum and products, and in exports
     of automotive vehicles, parts, and engines.

   * Secondary income receipts increased $4.3 billion to $39.2 billion, largely reflecting an
     increase in U.S. government transfers, mostly fines and penalties.

   * Primary income receipts increased $3.5 billion to $216.5 billion, reflecting increases in
     other investment income and in direct investment income.

Imports of goods and services and income payments

Imports of goods and services and income payments increased $25.2 billion to $947.1 billion.

   * Goods imports increased $18.4 billion to $584.0 billion, mostly reflecting increases in
     industrial supplies and materials, mostly crude oil, in capital goods except automotive,
     and in automotive vehicles, parts, and engines.

   * Primary income payments increased $7.1 billion to $168.8 billion, mostly reflecting increases
     in direct investment income and in other investment income, primarily interest on loans and
     deposits.

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

Net U.S. borrowing measured by financial-account transactions was $115.3 billion in the first
quarter of 2017, an increase from net borrowing of $74.8 billion in the fourth quarter of 2016.
A shift to net U.S. incurrence of liabilities excluding financial derivatives from fourth-quarter
net U.S. repayment was partly offset by a shift to net U.S. acquisition of financial assets
excluding financial derivatives from net U.S. liquidation.

Financial assets

Transactions in financial assets excluding financial derivatives shifted to net U.S. acquisition
of $282.7 billion in the first quarter from net U.S. liquidation of $84.5 billion in the fourth
quarter.

   * Transactions in other investment assets shifted to net U.S. acquisition of $50.9 billion
     in the first quarter from net liquidation of $115.9 billion in the fourth quarter, mostly
     reflecting a shift to net U.S. placement of deposits abroad from fourth-quarter net U.S.
     withdrawal and a shift to net U.S. provision of loans to foreigners from net foreign repayment.

   * Transactions in portfolio investment assets shifted to net U.S. purchases of $120.3 billion
     in the first quarter from net sales of $13.4 billion in the fourth quarter, mostly reflecting
     a shift to net purchases from net sales of equity and investment fund shares.

   * Net U.S. acquisition of direct investment assets increased $68.4 billion to $111.7 billion
     in the first quarter, mostly reflecting a shift to net acquisition by U.S. parents of debt
     instrument claims on their foreign affiliates.

Liabilities

Transactions in liabilities excluding financial derivatives shifted to net U.S. incurrence of
$395.0 billion in the first quarter from net U.S. repayment of $16.7 billion in the fourth quarter.

   * Transactions in other investment liabilities shifted to net U.S. incurrence of $149.6 billion
     in the first quarter from net U.S. repayment of $96.8 billion in the fourth quarter, mostly
     reflecting a shift to net incurrence of loan liabilities from fourth-quarter repayment.

   * Net U.S. incurrence of portfolio investment liabilities increased $92.9 billion to $155.3
     billion, reflecting a shift to net foreign purchases of equity and investment fund shares
     from net foreign sales in the fourth quarter.

   * Net U.S. incurrence of direct investment liabilities increased $72.5 billion to $90.1 billion,
     mostly reflecting a decrease in net repayment of U.S. parents' debt instrument liabilities
     and an increase in net incurrence of equity liabilities.

Financial derivatives

Transactions in financial derivatives other than reserves reflected first-quarter net borrowing
of $3.0 billion, a $4.0 billion decrease from the fourth quarter.

                               Statistical Discrepancy (table 1)

The statistical discrepancy decreased $37.8 billion in the first quarter to $1.5 billion.

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

                                                       Preliminary estimate    Revised estimate
Current-account balance                                       -112.4               -114.0
   Goods balance                                              -196.1               -195.1
   Services balance                                             63.8                 61.0
   Primary-income balance                                       61.5                 51.3
   Secondary-income balance                                    -41.5                -31.3
Net lending (+)/borrowing (-) from
   financial-account transactions                              -92.0                -74.8
Statistical discrepancy                                         20.4                 39.3


               Annual Update of the International Transactions Accounts (table 9)

The statistics in this release reflect the annual update of the U.S. international transactions
accounts. With this update, BEA has incorporated a new data source, an improved estimation
methodology, newly available and revised source data, and updated seasonal adjustments. Key
changes to the statistics are summarized below and in table 9.

   * Revised statistics on secondary income reflect new data sources for estimating taxes withheld
     by the U.S. government and by foreign governments on exports and imports of services and
     receipts and payments of primary income beginning with statistics for 1999. For 1999 to 2005,
     revised statistics on direct investment interest income, a component of primary income, also
     reflect the new data source for taxes. These statistics are derived by adding an estimate
     of taxes to BEA's survey data on direct investment interest income, which were reported net
     of taxes. The new tax estimates do not affect direct investment interest income beginning
     with statistics for 2006 because taxes are included indistinguishably in the survey data.

   * Revised statistics on direct investment income and direct investment financial transactions
     reflect a new method for estimating current-cost adjustments to direct investment income
     beginning with statistics for 1999.

   * Revised statistics on primary income and financial-account transactions reflect data reported
     on BEA's annual direct investment surveys and Treasury International Capital (TIC) annual
     surveys. The annual surveys provide more comprehensive data than were available previously.
     The statistical periods affected by the incorporation of newly available and revised data
     from these and other key sources are identified in the following table.


            Newly Available and Revised Source Data: Key Providers and Years Affected

BEA:
 * Quarterly international services surveys (2014–2016)
 * Quarterly direct investment surveys (2014–2016)
 * Annual direct investment surveys (2014–2016)

U.S. Census Bureau:
 * Data on goods exports and imports (2014–2016)

U.S. Customs and Border Protection:
 * Number of foreign residents traveling in the United States (2015-2016)
 * Number of U.S. citizens traveling abroad (2016)

U.S. Department of the Treasury:
 * Aggregate Holdings of Long-Term Securities by U.S. and Foreign Residents (2014-2016)
 * Foreign-Residents' Holdings of U.S. Securities, including Selected Money Market
   Instruments (2015-2016)
 * U.S. Ownership of Foreign Securities, including Selected Money Market Instruments (2015-2016)
 * Reports by Financial Institutions of Liabilities to, and Claims on, Foreign Residents
   by U.S. Residents (2014-2016)
 * Reports of Liabilities to, and Claims on, Unaffiliated Foreign Residents by U.S. Resident
   Non-Financial Institutions (2014-2016)
 * Reports of Holdings of, and Transactions in, Financial Derivatives Contracts with
   Foreign Residents (2014-2016)

A more detailed discussion of the new data sources for estimating withholding taxes and the new
methodology for estimating current-cost adjustments appears in "Preview of the 2017 Annual Update
of the International Economic Accounts," in the May issue of the Survey of Current Business.
Additional information on the updates to the U.S. international transactions accounts and the
U.S. international investment position accounts will be provided in the July issue of the
Survey of Current Business.


                         Next release:  September 19, 2017 at 8:30 A.M. EDT
                        U.S. International Transactions, Second Quarter 2017