FOR WIRE TRANSMISSION: 8:30 A.M. EDT, TUESDAY, September 18, 2012 Alexis N. Chaves (202) 606-9696 BEA 12-40 U.S. International Transactions: Second Quarter 2012 Current Account The U.S. current-account deficit—the combined balances on trade in goods and services, income, and net unilateral current transfers—decreased to $117.4 billion (preliminary) in the second quarter from $133.6 billion (revised) in the first quarter. The decrease in the current-account deficit was accounted for by a decrease in the deficit on goods and an increase in the surplus on income. Goods and services The deficit on goods and services decreased to $139.3 billion in the second quarter from $148.4 billion in the first. Goods The deficit on goods decreased to $185.8 billion in the second quarter from $194.3 billion in the first. Goods exports increased to $394.1 billion from $388.5 billion. Exports of five of the six major end-use categories increased. The largest increases were in foods, feeds, and beverages; consumer goods; and automotive vehicles, parts, and engines. The increase in foods, feeds, and beverages was mostly due to an increase in soybeans. The increase in consumer goods was mostly due to an increase in medicinal, dental, and pharmaceutical products. Industrial supplies and materials decreased; the decrease was more than accounted for by a decrease in nonmonetary gold (Table 2a) (www.bea.gov/iTable/iTableHtml.cfm?reqid=6&step=3&isuri=1&600=3). Goods imports decreased to $579.9 billion from $582.8 billion, though imports of only two of the six major end-use categories decreased. The decrease was more than accounted for by a decrease in imports of industrial supplies and materials that was, in turn, more than accounted for by a decrease in petroleum and products. The major end-use categories with the largest increases were capital goods, consumer goods, and automotive vehicles, parts, and engines. The increase in capital goods was largely due to an increase in machinery and equipment, and the increase in consumer goods reflected increases in both nondurable and durable goods (Table 2a) (www.bea.gov/iTable/iTableHtml.cfm?reqid=6&step=3&isuri=1&600=3). Services The surplus on services increased to $46.5 billion in the second quarter from $45.9 billion in the first. Services receipts increased to $157.0 billion from $155.5 billion. Five of the seven major services categories increased. The largest increases were in other private services, which includes items such as financial services, insurance services, and business, professional, and technical services; royalties and license fees; and travel. Services payments increased to $110.5 billion from $109.6 billion. Six of the seven major services categories increased; the increase mainly reflected an increase in other private services. Income The surplus on income increased to $55.5 billion in the second quarter from $47.4 billion in the first. Investment income Income receipts on U.S.-owned assets abroad increased to $184.6 billion from $183.2 billion. The increase was more than accounted for by an increase in other private receipts, which consists of interest and dividends. Direct investment receipts decreased. Income payments on foreign-owned assets in the United States decreased to $127.2 billion from $133.9 billion. The decrease was more than accounted for by a decrease in direct investment payments. Other private payments increased. Compensation of employees Receipts for compensation of U.S. residents paid by nonresidents remained at $1.5 billion in the second quarter.  Payments for compensation of foreign residents paid by U.S. residents remained at $3.4 billion. Unilateral current transfers Net unilateral current transfers to foreigners were $33.6 billion in the second quarter, up from $32.7 billion in the first. The increase was more than accounted for by an increase in the category of private remittances and other transfers. Capital Account Net capital account transactions are not available for the second quarter because source data are not yet available. Net payments were near zero in the first quarter. Financial Account Net financial inflows were $88.5 billion in the second quarter, down from $164.7 billion in the first. U.S.-owned assets abroad decreased more in the second quarter than in the first, and foreign-owned assets in the United States decreased in the second quarter after increasing in the first. U.S.-owned assets abroad U.S.-owned assets abroad decreased $206.8 billion in the second quarter, following a decrease of $106.5 billion in the first. U.S. claims on foreigners reported by U.S. banks and securities brokers decreased $266.7 billion in the second quarter, after a decrease of $218.4 billion in the first. Examples of these claims are U.S. banks’ deposits at foreign banks and U.S. banks’ loans to foreigners. The second-quarter decrease was largely due to a $245.7 billion decrease in claims for own accounts (Table 10a) (www.bea.gov/iTable/iTableHtml.cfm?reqid=6&step=3&isuri=1&600=23). U.S. sales of foreign securities exceeded purchases by $5.5 billion in the second quarter, following net sales of $3.6 billion in the first. Net purchases of foreign stocks were $21.0 billion, up from $14.8 billion. Net sales of foreign bonds were $26.5 billion, up from $18.4 billion (Table 8a) (www.bea.gov/iTable/iTableHtml.cfm?reqid=6&step=3&isuri=1&600=19). U.S. direct investment abroad was $79.2 billion in the second quarter, down from $116.1 billion in the first. The decrease was more than accounted for by a shift to net inflows from net outflows of intercompany debt investment (Table 7a) (www.bea.gov/iTable/iTableHtml.cfm?reqid=6&step=3&isuri=1&600=15). U.S. claims on unaffiliated foreigners reported by U.S. nonbanking concerns decreased $0.4 billion in the second quarter after an increase of $49.2 billion in the first. U.S. official reserve assets increased $3.3 billion in the second quarter, following an increase of $1.2 billion in the first. The second-quarter increase reflected an increase in the U.S. reserve position in the International Monetary Fund (IMF) associated with U.S. loans to the IMF under New Arrangements to Borrow. U.S. government assets other than official reserve assets decreased $16.7 billion in the second quarter, following a decrease of $51.1 billion in the first. The decreases reflected a reduction of central bank liquidity swaps between the U.S. Federal Reserve System and foreign central banks. Foreign-owned assets in the United States Foreign-owned assets in the United States decreased $118.7 billion in the second quarter, following an increase of $59.6 billion in the first. U.S. liabilities to foreigners reported by U.S. banks and securities brokers, other than those recorded under foreign official assets, decreased $197.8 billion in the second quarter, after a decrease of $122.1 billion in the first. 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 decrease was more than accounted for by a $204.7 billion decrease in liabilities for own accounts (Table 11a) (www.bea.gov/iTable/iTableHtml.cfm?reqid=6&step=3&isuri=1&600=25). Foreign private purchases of U.S. Treasury securities exceeded sales by $7.4 billion in the second quarter, slowing from net purchases of $43.8 billion in the first. Foreign private sales of U.S. securities other than U.S. Treasury securities exceeded purchases by $43.2 billion in the second quarter, a shift from foreign net purchases of $3.7 billion in the first. Net sales of U.S. stocks were $8.6 billion, shifting from net purchases of $18.9 billion. Net sales of U.S. corporate bonds increased to $33.3 billion from $14.8 billion. Net sales of U.S. federally sponsored agency bonds increased to $1.3 billion from $0.4 billion. (Table 8a) (www.bea.gov/iTable/iTableHtml.cfm?reqid=6&step=3&isuri=1&600=19). Foreign direct investment in the United States was $33.5 billion in the second quarter, up from $22.2 billion in the first. The increase was accounted for by a shift to inflows from outflows of intercompany debt investment and an increase in equity investment. These increases were partly offset by a decrease in reinvested earnings (Table 7a) (www.bea.gov/iTable/iTableHtml.cfm?reqid=6&step=3&isuri=1&600=15). U.S. liabilities to unaffiliated foreigners reported by U.S. nonbanking concerns decreased $8.8 billion in the second quarter, following an increase of $24.2 billion in the first. Foreign official assets in the United States increased $83.0 billion in the second quarter, after increasing $69.7 billion in the first. The second-quarter increase, like the first-quarter increase, was due to an increase in foreign-owned U.S. Treasury securities. Net shipments of U.S. currency to foreign countries were $7.1 billion in the second quarter, down from $18.1 billion in the first. The statistical discrepancy—the amount that balances the sum of the recorded credits and debits across all the accounts in the international transactions accounts —was $28.9 billion in the second quarter compared with -$31.1 billion in the first. In the second quarter, the U.S. dollar appreciated 1.5 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 first-quarter 2012 international transactions are revised from previously published statistics. The current-account deficit was revised down to $133.6 billion from $137.3 billion. The goods deficit was revised down to $194.3 billion from $194.5 billion; the services surplus was revised up to $45.9 billion from $43.5 billion; the income surplus was revised down to $47.4 billion from $47.6 billion; and net outflows of unilateral current transfers were revised down to $32.7 billion from $33.9 billion. Net financial inflows were revised up to $164.7 billion from $156.7 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) * * * BEA’s national, international, regional, and industry statistics; the SURVEY OF CURRENT BUSINESS; and BEA news releases are available without charge on BEA’s Web site at (www.bea.gov). By visiting 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 (www.bea.gov) along with Highlights (www.bea.gov/newsreleases/international/transactions/2012/pdf/trans212_fax.pdf) related to this release, the latest detailed statistics (www.bea.gov/iTable/index_ita.cfm) for U.S. international transactions, and a description of the estimation methods (www.bea.gov/methodologies/index.htm#international_meth) used to compile them. The second quarter statistics in this release are preliminary and will be revised on December 18, 2012. All links in the text of this release—including archived versions of this release—refer to the latest available revised statistics. September 18, 2012 Table 1. U.S. International Transactions [Millions of dollars, quarters seasonally adjusted] 2011 2012 Change: (Credits +, debits -)/1/ 2011 2012:I - I II III IV I r II p 2012:II Current account 1 Exports of goods and services and income receipts........................................... 2,847,988 689,593 713,499 724,800 720,095 728,724 737,144 8,420 2 Exports of goods and services............................................................ 2,103,367 508,811 524,000 537,351 533,204 544,016 551,065 7,049 3 Goods, balance of payments basis..................................................... 1,497,406 360,917 372,160 382,161 382,167 388,523 394,110 5,587 4 Services............................................................................. 605,961 147,894 151,839 155,190 151,037 155,493 156,956 1,463 5 Transfers under U.S. military agency sales contracts............................. 17,946 4,122 4,545 4,664 4,615 4,406 4,253 -153 6 Travel........................................................................... 116,115 27,407 29,260 30,194 29,254 30,900 31,264 364 7 Passenger fares.................................................................. 36,631 8,374 9,080 9,889 9,287 9,734 9,776 42 8 Other transportation............................................................. 43,064 10,520 10,760 10,956 10,827 10,863 10,931 68 9 Royalties and license fees....................................................... 120,836 29,405 30,343 31,055 30,033 30,429 30,935 506 10 Other private services........................................................... 270,193 67,749 67,585 68,123 66,736 68,833 69,476 643 11 U.S. government miscellaneous services........................................... 1,176 317 267 309 284 327 320 -7 12 Income receipts.......................................................................... 744,621 180,781 189,499 187,449 186,891 184,708 186,079 1,371 13 Income receipts on U.S.-owned assets abroad.......................................... 738,810 179,328 188,047 185,994 185,441 183,230 184,595 1,365 14 Direct investment receipts....................................................... 480,238 118,621 123,417 119,106 119,094 116,321 114,293 -2,028 15 Other private receipts........................................................... 256,649 60,262 64,123 66,361 65,903 66,146 69,803 3,657 16 U.S. government receipts......................................................... 1,923 445 506 527 444 763 499 -264 17 Compensation of employees............................................................ 5,811 1,453 1,452 1,455 1,450 1,479 1,484 5 18 Imports of goods and services and income payments........................................... -3,180,861 -774,367 -798,839 -801,143 -806,512 -829,657 -820,965 8,692 19 Imports of goods and services............................................................ -2,663,247 -646,036 -665,549 -672,173 -679,489 -692,380 -690,386 1,994 20 Goods, balance of payments basis..................................................... -2,235,819 -542,276 -559,344 -562,778 -571,421 -582,821 -579,899 2,922 21 Services............................................................................. -427,428 -103,761 -106,205 -109,395 -108,068 -109,559 -110,487 -928 22 Direct defense expenditures...................................................... -29,510 -7,570 -7,545 -7,343 -7,052 -6,838 -6,850 -12 23 Travel........................................................................... -78,651 -19,257 -19,628 -19,895 -19,871 -21,228 -21,387 -159 24 Passenger fares.................................................................. -31,109 -7,542 -7,698 -7,946 -7,923 -8,936 -8,821 115 25 Other transportation............................................................. -54,711 -13,439 -13,736 -13,767 -13,769 -13,716 -13,842 -126 26 Royalties and license fees....................................................... -36,620 -8,921 -8,543 -9,503 -9,652 -9,859 -10,040 -181 27 Other private services........................................................... -191,973 -45,825 -47,916 -49,656 -48,576 -47,866 -48,404 -538 28 U.S. government miscellaneous services........................................... -4,854 -1,207 -1,138 -1,284 -1,225 -1,115 -1,143 -28 29 Income payments.......................................................................... -517,614 -128,330 -133,290 -128,971 -127,022 -137,277 -130,578 6,699 30 Income payments on foreign-owned assets in the United States......................... -503,796 -124,863 -129,835 -125,508 -123,590 -133,885 -127,173 6,712 31 Direct investment payments....................................................... -158,559 -39,891 -43,855 -38,261 -36,552 -45,585 -37,919 7,666 32 Other private payments........................................................... -212,506 -51,501 -53,193 -54,157 -53,655 -55,396 -56,528 -1,132 33 U.S. government payments......................................................... -132,731 -33,471 -32,787 -33,090 -33,383 -32,904 -32,726 178 34 Compensation of employees............................................................ -13,817 -3,467 -3,455 -3,463 -3,433 -3,392 -3,406 -14 35 Unilateral current transfers, net........................................................... -133,053 -35,223 -33,777 -31,815 -32,240 -32,692 -33,586 -894 36 U.S. government grants................................................................... -47,350 -11,136 -13,486 -11,176 -11,551 -11,910 -11,657 253 37 U.S. government pensions and other transfers............................................. -8,947 -2,202 -2,227 -2,250 -2,269 -2,541 -2,574 -33 38 Private remittances and other transfers.................................................. -76,756 -21,884 -18,064 -18,389 -18,419 -18,241 -19,355 -1,114 September 18, 2012 Table 1. U.S. International Transactions (Continued) [Millions of dollars, quarters seasonally adjusted] 2011 2012 Change: (Credits +, debits -)/1/ 2011 2012:I - I II III IV I r II p 2012:II Capital account 39 Capital account transactions, net........................................................... -1,212 -29 -829 -300 -55 -1 n.a. n.a. Financial account 40 U.S.-owned assets abroad, excluding financial derivatives (increase/financial outflow (-))........................................................ -483,653 -372,944 7,418 -91,896 -26,231 106,549 206,800 100,251 41 U.S. official reserve assets............................................................. -15,877 -3,619 -6,267 -4,079 -1,912 -1,233 -3,289 -2,056 42 Gold................................................................................. 0 0 0 0 0 0 0 0 43 Special drawing rights............................................................... 1,752 1,961 -159 -27 -23 -11 -10 1 44 Reserve position in the International Monetary Fund.................................. -18,079 -6,428 -5,974 -3,909 -1,768 -1,078 -3,179 -2,101 45 Foreign currencies................................................................... 450 848 -134 -143 -121 -144 -100 44 46 U.S. government assets, other than official reserve assets............................... -103,666 -547 -1,358 -1,137 -100,624 51,076 16,725 -34,351 47 U.S. credits and other long-term assets.............................................. -7,307 -1,307 -2,337 -1,396 -2,267 -2,631 -2,393 238 48 Repayments on U.S. credits and other long-term assets................................ 3,333 610 1,259 812 653 352 630 278 49 U.S. foreign currency holdings and U.S. short-term assets............................ -99,692 150 -279 -553 -99,010 53,356 18,489 -34,867 50 U.S. private assets...................................................................... -364,110 -368,778 15,042 -86,679 76,305 56,706 193,364 136,658 51 Direct investment.................................................................... -419,332 -104,404 -133,397 -70,323 -111,208 -116,094 -79,229 36,865 52 Foreign securities................................................................... -146,797 -85,472 -57,195 -40,110 35,980 3,604 5,537 1,933 53 U.S. claims on unaffiliated foreigners reported by U.S. nonbanking concerns.......... -11,608 -92,203 6,147 9,326 65,122 -49,183 396 49,579 54 U.S. claims reported by U.S. banks and securities brokers............................ 213,627 -86,699 199,487 14,428 86,411 218,379 266,660 48,281 55 Foreign-owned assets in the United States, excluding financial derivatives (increase/financial inflow (+))......................................................... 1,000,990 578,972 98,554 266,397 57,067 59,564 -118,727 -178,291 56 Foreign official assets in the United States............................................. 211,826 72,974 121,822 19,889 -2,859 69,711 83,010 13,299 57 U.S. government securities........................................................... 158,735 67,719 97,184 11,249 -17,417 85,431 70,725 -14,706 58 U.S. Treasury securities......................................................... 171,179 56,274 104,363 28,115 -17,573 85,068 84,870 -198 59 Other............................................................................ -12,444 11,445 -7,179 -16,866 156 363 -14,145 -14,508 60 Other U.S. government liabilities.................................................... 9,063 2,714 2,236 2,287 1,826 2,833 2,682 -151 61 U.S. liabilities reported by U.S. banks and securities brokers....................... 30,010 -3,090 15,764 5,121 12,215 -19,305 5,982 25,287 62 Other foreign official assets........................................................ 14,018 5,631 6,638 1,232 517 752 3,621 2,869 63 Other foreign assets in the United States................................................ 789,164 505,998 -23,268 246,508 59,926 -10,147 -201,737 -191,590 64 Direct investment.................................................................... 233,988 33,365 61,281 63,222 76,120 22,202 33,479 11,277 65 U.S. Treasury securities............................................................. 240,878 55,054 -17,613 120,918 82,519 43,834 7,365 -36,469 66 U.S. securities other than U.S. Treasury securities.................................. -56,442 4,338 -5,108 -20,396 -35,276 3,654 -43,174 -46,828 67 U.S. currency........................................................................ 54,996 12,576 13,989 9,614 18,817 18,057 7,116 -10,941 68 U.S. liabilities to unaffiliated foreigners reported by U.S. nonbanking concerns..... 6,567 40,688 25,538 -19,670 -39,989 24,212 -8,754 -32,966 69 U.S. liabilities reported by U.S. banks and securities brokers....................... 309,177 359,977 -101,355 92,820 -42,265 -122,106 -197,769 -75,663 70 Financial derivatives, net.................................................................. 39,010 2,927 7,419 -3,949 32,613 -1,396 464 1,860 71 Statistical discrepancy (sum of above items with sign reversed)............................. -89,208 -88,930 6,555 -62,094 55,263 -31,092 /2/28,870 /3/59,962 Memoranda: 72 Balance on goods (lines 3 and 20)........................................................... -738,413 -181,358 -187,184 -180,617 -189,254 -194,298 -185,790 8,508 73 Balance on services (lines 4 and 21)........................................................ 178,533 44,133 45,634 45,795 42,969 45,934 46,469 535 74 Balance on goods and services (lines 2 and 19).............................................. -559,880 -137,225 -141,549 -134,822 -146,286 -148,364 -139,321 9,043 75 Balance on income (lines 12 and 29)......................................................... 227,007 52,451 56,209 58,478 59,869 47,431 55,500 8,069 76 Unilateral current transfers, net (line 35)................................................. -133,053 -35,223 -33,777 -31,815 -32,240 -32,692 -33,586 -894 77 Balance on current account (lines 1, 18, and 35 or lines 74, 75, and 76).................... -465,926 -119,997 -119,117 -108,158 -118,656 -133,624 -117,407 16,217 78 Net financial flows (lines 40, 55, and 70).................................................. 556,347 208,955 113,391 170,552 63,449 164,717 88,537 -76,180 p Preliminary r Revised n.a. Not available 1 Credits, +: Exports of goods and services and income receipts; unilateral current transfers to the United States; capital account receipts; financial inflows—increase in foreign-owned assets (U.S. liabilities) or decrease in U.S.-owned assets (U.S. claims). Debits, –: Imports of goods and services and income payments; unilateral current transfers to foreigners; capital account payments; financial outflows—decrease in foreign-owned assets (U.S. liabilities) or increase in U.S.-owned assets (U.S. claims). 2 Calculated excluding capital account transactions, net (line 39). 3 The change shown here is calculated as the change from the prior period, not as the sum of changes in the above items. Note: Details may not add to totals because of rounding. Source: U. S. Bureau of Economic Analysis