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EMBARGOED UNTIL RELEASE AT 8:30 a.m. EDT, Thursday, June 23, 2022

BEA 22–26

U.S. International Transactions, First Quarter 2022 and Annual Update

Current-Account Deficit Widens by 29.6 Percent in First Quarter

Current-Account Balance

The U.S. current-account deficit, which reflects the combined balances on trade in goods and services and income flows between U.S. residents and residents of other countries, widened by $66.6 billion, or 29.6 percent, to $291.4 billion in the first quarter of 2022, according to statistics released today by the U.S. Bureau of Economic Analysis (BEA). The revised fourth-quarter deficit was $224.8 billion.

The first-quarter deficit was 4.8 percent of current-dollar gross domestic product, up from 3.7 percent in the fourth quarter.

The $66.6 billion widening of the current-account deficit in the first quarter mostly reflected an increased deficit on goods.

Quarterly U.S. Current Account and Component

COVID–19 Impact on First-Quarter 2022 International Transactions

All major categories of current-account transactions increased in the first quarter of 2022, the seventh consecutive quarter of broad-based growth following notable COVID–19-related declines in the second quarter of 2020. The full economic effects of the COVID–19 pandemic cannot be quantified in the statistics, because the impacts are generally embedded in source data and cannot be separately identified.

Current-Account Transactions (tables 1-5)

Exports of goods and services to, and income received from, foreign residents increased $25.7 billion to $1.03 trillion in the first quarter. Imports of goods and services from, and income paid to, foreign residents increased $92.3 billion to $1.32 trillion.

Quarterly U.S. Current Account Transactions

Trade in goods (table 2)

Exports of goods increased $13.9 billion to $487.4 billion, mostly reflecting an increase in industrial supplies and materials, primarily petroleum and products. Imports of goods increased $71.1 billion to $829.7 billion, reflecting widespread increases in consumer goods, in industrial supplies and materials, and in capital goods.

Trade in services (table 3)

Exports of services increased $4.3 billion to $217.2 billion, mainly reflecting increases in government goods and services n.i.e. (not included elsewhere), in other business services, primarily professional and management consulting services, and in travel, led by other personal travel. Imports of services increased $5.8 billion to $158.7 billion, mainly reflecting increases in transport, mostly sea freight transport, and in charges for the use of intellectual property, primarily licenses for the use of outcomes of research and development (such as patents and trade secrets).

Primary income (table 4)

Receipts of primary income increased $7.1 billion to $278.6 billion, and payments of primary income increased $10.7 billion to $245.2 billion. The increases in both receipts and payments mostly reflected an increase in portfolio investment income, primarily equity securities and interest on long-term debt securities.

Secondary income (table 5)

Receipts of secondary income increased $0.5 billion to $43.6 billion, mostly reflecting an increase in general government transfers, primarily taxes on income and wealth. Payments of secondary income increased $4.7 billion to $84.7 billion, reflecting increases in general government transfers, mostly international cooperation, and in private transfers, mostly insurance-related transfers.

Capital-Account Transactions (table 1)

Capital-transfer payments increased $0.2 billion to $2.1 billion in the first quarter, mostly reflecting an increase in U.S. government investment grants.

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

Net financial-account transactions were −$277.5 billion in the first quarter, reflecting net U.S. borrowing from foreign residents.

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

First-quarter transactions increased U.S. residents' foreign financial assets by $343.1 billion. Transactions increased portfolio investment assets, mainly long-term debt securities and equity, by $203.1 billion; direct investment assets, primarily equity, by $115.2 billion; other investment assets, primarily loans, by $23.9 billion; and reserve assets by $0.9 billion.

Liabilities (tables 1, 6, 7, and 8)

First-quarter transactions increased U.S. liabilities to foreign residents by $626.4 billion. Transactions increased other investment liabilities, mostly loans and deposits, by $293.8 billion; portfolio investment liabilities by $239.0 billion, resulting from large and partly offsetting transactions in debt and equity securities; and direct investment liabilities, mostly equity, by $93.5 billion.

Financial derivatives (table 1)

Net transactions in financial derivatives were $5.8 billion in the first quarter, reflecting net U.S. lending to foreign residents.

	Preliminary estimate	Revised estimate
Updates to Fourth-Quarter 2021 International Transactions Accounts Balances Billions of dollars, seasonally adjusted
Current-account balance	–217.9	−224.8
Goods balance	−283.4	−285.0
Services balance	54.5	60.0
Primary income balance	44.2	37.0
Secondary income balance	−33.2	−36.8
Net financial-account transactions	−133.6	−203.9

Annual Update of the International Transactions Accounts

The statistics in this release reflect the annual update of the U.S. International Transactions Accounts (ITAs). A summary of the revisions to high-level aggregates is shown in table 9. With this update, BEA has incorporated newly available and revised source data for 2019–2021 and updated seasonal adjustments for 2017–2021 for most statistical series. In addition, there are three updates that are beyond the scope of updated source data and seasonal adjustments:

Transactions and income for short-term portfolio investment assets for 2012–2021 were revised to incorporate improved methodology and source data for foreign commercial paper and other short-term securities.
Financial services exports and imports and related withholding taxes in secondary income receipts and payments for 2015–2021 were revised to incorporate the results of BEA's 2019 Benchmark Survey of Financial Services Transactions Between U.S. Financial Services Providers and Foreign Persons.
Transactions and income for long-term portfolio investment assets and liabilities for 2019–2021 were revised to address a large series break in long-term portfolio investment holdings' source data. Sourced from the monthly "Aggregate Holdings of Long-Term Securities by U.S. and Foreign Residents" (SLT), data show respondents reported unusually large revisions in June 2021. For more information about the SLT revisions, see footnote 5 in the "Footnotes and Notices" section of "Securities (B): Portfolio Holdings of U.S. and Foreign Securities."

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

Agency	Data	Years affected
BEA	Benchmark and quarterly financial services surveys	2015–2021
	Quarterly international services surveys	2019–2021
	Annual and quarterly direct investment surveys	2019–2021
U.S. Census Bureau	Revised source data for Census-basis goods	2019–2021
U.S. Department of the Treasury	Annual portfolio investment surveys	2020–2021
U.S. Department of the Treasury	Quarterly and monthly portfolio and other investment surveys	2019–2021

With this annual update, BEA has also introduced several new standard ITA tables into BEA's Interactive Data Application and Data Application Programming Interface. Several existing standard table presentations have also been modified. These tables are described below.

Tables 4.6 and 6.3, which were introduced in December 2021 with statistics on U.S. special purpose entities (SPEs), have been expanded to include foreign SPEs. SPEs are legal entities with little or no employment or physical presence. Table 4.6 presents primary income on direct investment in foreign and U.S. SPEs, and table 6.3 presents financial transactions for direct investment in foreign and U.S. SPEs.

Quarterly statistics on direct investment by country and industry, which previously were available in supplemental Excel files on BEA's website, have been incorporated into the standard presentation of the ITAs in new tables 4.5 and 6.2. Table 4.5 presents international transactions in primary income on direct investment by country and industry, and table 6.2 presents international financial transactions for direct investment by country and industry.

Table 2.2, which presents seasonally adjusted trade in goods by selected countries and areas, and table 3.2, which presents seasonally adjusted trade in services by selected countries and areas, have been expanded to include Australia, Belgium, Ireland, Israel, Malaysia, the Netherlands, Switzerland, and Vietnam. In addition, table 2.3, which presents not seasonally adjusted trade in goods by selected countries and areas, has been expanded to include Vietnam.

More information on the annual update is available in "Preview of the 2022 Annual Update of the International Economic Accounts" in the April 2022 Survey of Current Business, and additional information will be provided in July. The U.S. International Economic Accounts: Concepts and Methods has also been updated to reflect changes implemented with this annual update.

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Next release: September 22, 2022 at 8:30 A.M. EDT
U.S. International Transactions, Second Quarter 2022

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Full Release & Tables (PDF)

Tables Only (Excel)

Release Highlights (PDF)

Historical Comparisons (PDF)

Historical Comparisons (Annual) (PDF)

Quarterly Current-Account Balances (PDF)

Annual Current-Account Balances (PDF)

Technical

Rodolfo Telles Jr.

(301) 278-9195

Rodolfo.Telles@bea.gov

Media (BEA)

Connie O'Connell

301-278-9003

Connie.OConnell@bea.gov

Additional Information

Resources

Information on COVID–19 and recovery impacts is available on our website.
Stay informed about BEA developments by reading The BEA Wire, signing up for BEA's email subscription service, or following BEA on Twitter @BEA_News.
Historical time series for these estimates can be accessed in BEA's Interactive Data Application.
Access BEA data by registering for BEA's Data Application Programming Interface.
For more on BEA's statistics, see BEA's online journal, the Survey of Current Business.
For upcoming economic indicators, see BEA's news release schedule.
More information on the International Transactions Accounts (ITAs) and a description of the estimation methods used to compile them is provided in U.S. International Economic Accounts: Concepts and Methods.

Definitions

The current account consists of transactions between U.S. residents and nonresidents in goods, services, primary income, and secondary income.

Goods are physical items with ownership rights that can be exchanged among institutional units through transactions.

Services transactions consist of transactions arising from productive activities that change the condition of the consumer or that facilitate the exchange of products and financial assets.

Primary income transactions include investment income and compensation of employees. Investment income is the return on holdings of financial assets and includes direct investment income, portfolio investment income, other investment income, and income on reserve assets. Compensation of employees is income for the contribution of labor inputs to the production process.

Secondary income consists of current transfers between residents and nonresidents. Unlike an exchange, a transfer is a transaction in which a good, service, or asset is provided without a corresponding return of economic value. Secondary income receipts and payments include U.S. government and private transfers, such as international cooperation (primarily U.S. government grants), U.S. government pensions, fines and penalties, withholding taxes, personal transfers (remittances), insurance-related transfers, and other current transfers.

The capital account consists of capital transfers between residents and nonresidents and the cross-border acquisition and disposal of nonproduced nonfinancial assets. Capital transfers include debt forgiveness, investment grants, and certain disaster-related nonlife insurance claims. Nonproduced nonfinancial assets include the acquisition and disposal of natural resources, outright sales and purchases of franchises and trademarks, and fees paid by one sporting franchise to another for the transfer of a player. Capital account transactions are distinguished from current account transactions in that capital account transactions result in a change in the assets of one or both parties to the transaction without affecting the income or savings of either party.

The financial account consists of transactions between U.S. residents and nonresidents for direct investment, portfolio investment, other investment, reserves, and financial derivatives other than reserves.

Direct investment is a category of cross-border investment associated with a resident in one economy having control or a significant degree of influence over the management of an enterprise resident in another economy. Ownership or control of 10 percent or more of the voting securities of an entity is the threshold for separating direct investment from other types of investment. Direct investment transactions include transactions in equity (including reinvestment of earnings) and debt instruments.

Portfolio investment transactions consist of cross-border transactions involving equity and investment fund shares and debt securities, excluding those included in direct investment or reserve assets.

Other investment is a residual category that includes cross-border financial instruments other than those included in direct investment, portfolio investment, financial derivatives, and reserve assets. Other investment transactions consist of transactions in other equity (equity not in the form of securities), currency and deposits, loans, insurance technical reserves, trade credit and advances, and, for liabilities, special drawing rights allocations.

Reserve assets are those external assets that are readily available to and controlled by monetary authorities for meeting balance of payments financing needs, for intervention in exchange markets to affect the currency exchange rate, and for other related purposes such as maintaining confidence in the currency and the economy and serving as a basis for foreign borrowing. The major published components are monetary gold, International Monetary Fund (IMF) special drawing rights (SDRs), reserve position in the IMF, and other reserve assets.

Financial derivatives other than reserves consist of financial contracts that are linked to underlying financial instruments, commodities, or indicators. Transactions in financial derivatives consist of U.S. cash receipts and payments arising from the sale, purchase, periodic settlement, or final settlement of financial derivatives contracts. 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).

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 can also be calculated as the difference between net lending (borrowing) measured from financial account transactions and net lending (borrowing) measured from current and capital account transactions.

The current account balance is the difference between credits (exports and income receipts) and debits (imports and income payments) in the current account. The balance is a net measure of current account transactions between the United States and the rest of the world. A positive balance indicates a current account surplus. A negative balance indicates a current account deficit.

Net lending (borrowing) measures the balance of funds supplied to the rest of the world. Net lending means that, in net terms, the U.S. economy supplies funds to the rest of the world. Net borrowing means the opposite. Net lending (borrowing) can be measured by current and capital account transactions or by financial account transactions. Conceptually, the two measures are equal. In practice, the two measures differ by the statistical discrepancy.

Release and update cycle

Preliminary quarterly statistics for the ITAs are released in March, June, September, and December approximately 80 days after the end of the reference quarter. These statistics are updated the following quarter to incorporate new source data. Quarterly statistics are open for revision for at least the prior three years in annual updates released in June. Preliminary annual statistics are released in March along with statistics for the fourth quarter of the previous year. These annual statistics are open for revision for at least the prior three years in subsequent annual updates.

Related statistics

The ITAs constitute one part of a broader set of U.S. international economic accounts that, taken together, provide a comprehensive, integrated, and detailed picture of U.S. international economic activities.

The international investment position (IIP) accounts are released quarterly. Financial transactions that are reported in the ITAs are one type of change in position recorded in the IIP accounts.

Statistics on direct investment and multinational enterprises (MNEs) include annual statistics on the activities of U.S. MNEs and U.S. affiliates of foreign MNEs, detailed annual and quarterly statistics on direct investment, and annual statistics on new foreign direct investment in the United States.

Statistics on international services, released annually, include detailed annual information on trade in services and on services supplied through the channel of direct investment by affiliates of MNEs.

U.S. international trade in goods and services, released by BEA and the U.S. Census Bureau, provides monthly statistics on trade in goods and services.