FOR WIRE TRANSMISSION: 8:30 A.M. EST, THURSDAY, December 15, 2011 Sarah P. Scott: (202) 606-9286 BEA 11-60 U.S. International Transactions: Third Quarter 2011 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 $110.3 billion (preliminary) in the third quarter of 2011, from $124.7 billion (revised) in the second quarter. More than half of the decrease reflected a decrease in the deficit on goods. A decrease in net unilateral current transfers and increases in the surpluses on services and on income also contributed. Goods and services The deficit on goods and services decreased to $135.6 billion in the third quarter from $146.2 billion in the second. Goods The deficit on goods decreased to $181.8 billion in the third quarter from $190.6 billion in the second. Goods exports increased to $382.7 billion from $373.0 billion. Most major end-use categories increased. Most of the increase was accounted for by increases in industrial supplies and materials and in capital goods. The increase in industrial supplies and materials largely reflected increases in nonmonetary gold and in petroleum and products. The increase in capital goods was mostly due to an increase in civilian aircraft (Table 2a (www.bea.gov/iTable/iTableHtml.cfm?reqid=6&step=3&isuri=1&600=3)). Goods imports increased slightly to $564.5 billion from $563.6 billion despite decreases in most major end-use categories. The increase in total imports reflected an increase in automotive vehicles, parts, and engines that was mostly offset by decreases in industrial supplies and materials and in consumer goods. Most of the growth in automotive vehicles, parts, and engines was accounted for by passenger cars, new and used. Industrial supplies and materials decreased as a result of a decrease in petroleum and products. The decrease in consumer goods was primarily due to a reduction in “other” household goods (Table 2a (www.bea.gov/iTable/iTableHtml.cfm?reqid=6&step=3&isuri=1&600=3)). Services The surplus on services increased to $46.2 billion in the third quarter from $44.4 billion in the second. Services receipts increased to $153.8 billion from $150.8 billion. All of the major services categories increased; the increases were largest in passenger fares, in travel, in other private services, and in royalties and license fees. Services payments increased to $107.6 billion from $106.4 billion. The largest increases were in other private services and in royalties and license fees. Most of the other major services categories also increased. Income The surplus on income increased to $58.3 billion in the third quarter from $56.9 billion in the second. Investment income Income receipts on U.S.-owned assets abroad decreased to $187.0 billion from $189.9 billion. The decrease was more than accounted for by a decrease in direct investment receipts; an increase in other private receipts (which consists of interest and dividends) was partly offsetting. Income payments on foreign-owned assets in the United States decreased to $126.5 billion from $130.7 billion. The decrease was more than accounted for by a decrease in direct investment payments; an increase in other private payments (which consists of interest and dividends) was partly offsetting. Compensation of employees Receipts for compensation of U.S. workers abroad remained at $1.4 billion. Payments for compensation of foreign workers in the United States remained at $3.6 billion. Unilateral current transfers Net unilateral current transfers to foreigners were $33.0 billion in the third quarter, down from $35.4 billion in the second. The decrease mostly reflected a decrease in U.S. government grants. Capital Account Net capital account flows were zero in the third quarter, compared with net payments of $0.8 billion in the second quarter. Financial Account Net financial inflows were $183.9 billion in the third quarter, up from $35.4 billion in the second. Both foreign-owned assets in the United States and U.S.-owned assets abroad increased; foreign-owned assets in the United States increased substantially more than U.S.-owned assets abroad. The third-quarter growth in U.S.-owned assets abroad was a reversal from a decrease in the second quarter. U.S.-owned assets abroad U.S.-owned assets abroad increased $70.8 billion in the third quarter, following a decrease of $25.1 billion in the second. U.S. claims on foreigners reported by U.S. banks and securities brokers decreased $13.9 billion in the third quarter, after a decrease of $194.7 billion in the second. (Examples of these claims are U.S. banks’ deposits at foreign banks and U.S. banks’ loans to foreigners.) The third-quarter decrease reflected a significant decrease in claims for customers’ accounts that was partly offset by a substantial increase in claims for own accounts (Table 10a (www.bea.gov/iTable/iTableHtml.cfm?reqid=6&step=3&isuri=1&600=23)). U.S. net purchases of foreign securities were $27.6 billion in the third quarter, following net purchases of $30.4 billion in the second. Net purchases of foreign stocks slowed to $22.8 billion from $26.9 billion. Net purchases of foreign bonds were $4.8 billion, up from $3.5 billion (Table 8a (www.bea.gov/iTable/iTableHtml.cfm?reqid=6&step=3&isuri=1&600=19)). U.S. direct investment abroad was $70.8 billion in the third quarter, down from $138.5 billion in the second. Most of the decrease was due to a decrease in equity investment and a shift to inflows of intercompany debt investment. A decrease in reinvested earnings also contributed (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 $18.9 billion in the third quarter, after a decrease of $7.1 billion in the second. U.S. official reserve assets increased $4.1 billion in the third quarter, following an increase of $6.3 billion in the second. The increase reflected an increase in the U.S. reserve position in the International Monetary Fund (IMF) due to an increase in the U.S. loan to the IMF under New Arrangements to Borrow. U.S. government assets other than official reserve assets increased $1.3 billion in the third quarter, after an increase of $1.4 billion in the second. Foreign-owned assets in the United States Foreign-owned assets in the United States increased $254.7 billion in the third quarter, following an increase of $2.8 billion in the second. U.S. liabilities to foreigners reported by U.S. banks and securities brokers (other than foreign official assets) increased $63.7 billion in the third quarter, after a decrease of $112.6 billion in the second. (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 increase resulted from an increase in liabilities for own accounts; a large increase in deposits abroad was partly offset by decreases in repurchase agreements and other liabilities (Table 11a (www.bea.gov/iTable/iTableHtml.cfm?reqid=6&step=3&isuri=1&600=25)). Foreign private net purchases of U.S. Treasury securities were $123.8 billion in the third quarter, a shift from net sales of $59.3 billion in the second. Foreign private net sales of U.S. securities other than U.S. Treasury securities were $23.0 billion in the third quarter, up from net sales of $10.7 billion in the second. The third-quarter increase was due to a shift to net sales of U.S. stocks of $27.1 billion from net purchases of $27.6 billion. Partly offsetting were a shift to net purchases of U.S. federally sponsored agency bonds from net sales and a decrease in net sales of corporate bonds. Net purchases of U.S. federally sponsored agency bonds were $13.0 billion in the third quarter, a shift from net sales of $23.4 billion in the second. Net sales of U.S. corporate bonds were $8.9 billion, down from $15.0 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 $75.3 billion in the third quarter, following investment of $52.1 billion in the second. The increase was accounted for by a shift to inflows of intercompany debt investment, and a slight increase in equity investment. Reinvested earnings edged slightly lower (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 $19.0 billion in the third quarter, following an increase of $24.2 billion in the second. Foreign official assets in the United States increased $24.4 billion in the third quarter, after an increase of $95.1 billion in the second. The increase was due to net purchases of U.S. Treasury securities, particularly by European countries. Net shipments of U.S. currency to foreign countries were $9.6 billion in the third quarter, down from $14.0 billion in the second. The statistical discrepancy—net errors and omissions in recorded transactions—was -$73.6 billion in the third quarter compared with $90.2 billion in the second. In the third quarter, the U.S. dollar appreciated 0.3 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 second-quarter 2011 international transactions are revised from previously published statistics. The current-account deficit was revised up to $124.7 billion from $118.0 billion. The goods deficit was revised up to $190.6 billion from $190.4 billion; the services surplus was revised down to $44.4 billion from $45.4 billion; the income surplus was revised down to $56.9 billion from $61.1 billion; and net outflows of unilateral current transfers were revised up to $35.4 billion from $34.2 billion. Net financial inflows were revised up to $35.4 billion from $25.7 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. December 15, 2011 Table 1. U.S. International Transactions [Millions of dollars, quarters seasonally adjusted] 2010 2011 Change: (Credits +, debits -) 2010 2011 I II III IV I II r III p II-III Current account 1 Exports of goods and services and income receipts...................................... 2,500,817 595,359 616,163 632,309 656,986 687,815 715,046 724,845 9,799 2 Exports of goods and services....................................................... 1,837,577 436,501 451,134 465,194 484,747 507,557 523,834 536,473 12,639 3 Goods, balance of payments basis................................................ 1,288,699 304,572 315,954 325,514 342,659 361,544 373,045 382,718 9,673 4 Services........................................................................ 548,878 131,929 135,180 139,680 142,088 146,013 150,789 153,754 2,965 5 Transfers under U.S. military agency sales contracts........................ 17,483 4,312 4,498 4,532 4,141 4,231 4,474 4,559 85 6 Travel...................................................................... 103,505 25,212 25,395 26,203 26,695 27,301 29,164 29,873 709 7 Passenger fares............................................................. 30,931 7,135 7,725 8,076 7,994 8,362 9,122 9,859 737 8 Other transportation........................................................ 39,936 9,719 9,998 10,098 10,121 10,464 10,636 10,722 86 9 Royalties and license fees.................................................. 105,583 25,615 26,227 26,720 27,021 28,012 29,822 30,470 648 10 Other private services...................................................... 250,320 59,568 61,097 63,805 65,851 67,329 67,306 67,985 679 11 U.S. government miscellaneous services...................................... 1,121 369 239 247 266 314 265 285 20 12 Income receipts..................................................................... 663,240 158,857 165,030 167,115 172,239 180,258 191,212 188,373 -2,839 13 Income receipts on U.S.-owned assets abroad..................................... 657,963 157,540 163,708 165,793 170,921 178,898 189,852 187,009 -2,843 14 Direct investment receipts.................................................. 432,000 102,518 107,629 109,653 112,199 118,231 125,736 121,047 -4,689 15 Other private receipts...................................................... 224,469 54,584 55,729 55,785 58,371 60,231 63,593 65,547 1,954 16 U.S. government receipts.................................................... 1,494 438 350 355 351 436 523 415 -108 17 Compensation of employees....................................................... 5,278 1,317 1,321 1,322 1,317 1,360 1,359 1,363 4 18 Imports of goods and services and income payments...................................... -2,835,620 -678,617 -703,516 -717,682 -735,804 -775,129 -804,315 -802,120 2,195 19 Imports of goods and services....................................................... -2,337,604 -556,144 -581,657 -596,307 -603,496 -647,529 -670,040 -672,053 -2,013 20 Goods, balance of payments basis................................................ -1,934,555 -457,404 -481,912 -493,336 -501,904 -543,767 -563,609 -564,469 -860 21 Services........................................................................ -403,048 -98,740 -99,745 -102,971 -101,592 -103,763 -106,430 -107,584 -1,154 22 Direct defense expenditures................................................. -30,391 -7,721 -7,590 -7,609 -7,471 -7,570 -7,545 -7,364 181 23 Travel...................................................................... -75,507 -19,085 -18,291 -19,077 -19,054 -19,280 -19,850 -20,153 -303 24 Passenger fares............................................................. -27,279 -6,228 -6,770 -7,022 -7,259 -7,552 -7,701 -7,954 -253 25 Other transportation........................................................ -51,202 -11,919 -13,018 -13,600 -12,666 -13,451 -13,949 -13,718 231 26 Royalties and license fees.................................................. -33,450 -8,998 -7,916 -8,177 -8,359 -8,879 -8,587 -8,943 -356 27 Other private services...................................................... -180,598 -43,702 -45,045 -46,265 -45,585 -45,949 -47,741 -48,314 -573 28 U.S. government miscellaneous services...................................... -4,621 -1,087 -1,116 -1,221 -1,198 -1,081 -1,057 -1,138 -81 29 Income payments..................................................................... -498,016 -122,473 -121,859 -121,375 -132,309 -127,600 -134,276 -130,068 4,208 30 Income payments on foreign-owned assets in the United States.................... -483,504 -118,856 -118,222 -117,727 -128,700 -124,012 -130,702 -126,489 4,213 31 Direct investment payments.................................................. -151,361 -35,980 -35,056 -35,465 -44,861 -39,249 -45,200 -40,175 5,025 32 Other private payments...................................................... -196,004 -48,916 -48,997 -48,098 -49,993 -51,014 -51,731 -52,382 -651 33 U.S. government payments.................................................... -136,139 -33,960 -34,169 -34,164 -33,846 -33,749 -33,771 -33,932 -161 34 Compensation of employees....................................................... -14,512 -3,617 -3,637 -3,649 -3,609 -3,588 -3,574 -3,578 -4 35 Unilateral current transfers, net...................................................... -136,095 -35,034 -32,947 -34,754 -33,360 -32,277 -35,449 -33,006 2,443 36 U.S. government grants.............................................................. -44,717 -12,285 -10,005 -11,031 -11,396 -10,987 -13,179 -10,956 2,223 37 U.S. government pensions and other transfers........................................ -10,365 -2,548 -2,590 -2,616 -2,611 -2,629 -2,654 -2,675 -21 38 Private remittances and other transfers............................................. -81,013 -20,201 -20,352 -21,107 -19,353 -18,661 -19,617 -19,375 242 December 15, 2011 Table 1. U.S. International Transactions (Continued) [Millions of dollars, quarters seasonally adjusted] 2010 2011 Change: (Credits +, debits -) 2010 2011 I II III IV I II r III p II-III Capital account 39 Capital account transactions, net...................................................... -152 -3 -2 -146 -2 -29 -829 0 829 Financial account 40 U.S.-owned assets abroad, excluding financial derivatives (increase/financial outflow (-))..................................................... -1,005,182 -313,010 -168,537 -286,834 -236,802 -334,359 25,115 -70,833 -95,948 41 U.S. official reserve assets........................................................ -1,834 -773 -165 -1,096 200 -3,619 -6,267 -4,079 2,188 42 Gold............................................................................ 0 0 0 0 0 0 0 0 0 43 Special drawing rights.......................................................... -31 -7 -6 -8 -10 1,961 -159 -27 132 44 Reserve position in the International Monetary Fund............................. -1,293 -581 -77 -956 321 -6,428 -5,974 -3,909 2,065 45 Foreign currencies.............................................................. -510 -185 -82 -132 -111 848 -134 -143 -9 46 U.S. government assets, other than official reserve assets.......................... 7,540 9,433 -2,441 788 -240 -547 -1,358 -1,265 93 47 U.S. credits and other long-term assets......................................... -4,976 -1,247 -1,835 -1,027 -867 -1,307 -2,337 -1,034 1,303 48 Repayments on U.S. credits and other long-term assets........................... 2,408 399 783 679 547 610 1,259 407 -852 49 U.S. foreign currency holdings and U.S. short-term assets....................... 10,108 10,281 -1,389 1,136 80 150 -279 -638 -359 50 U.S. private assets................................................................. -1,010,888 -321,669 -165,931 -286,526 -236,762 -330,193 32,740 -65,490 -98,230 51 Direct investment............................................................... -351,350 -110,148 -69,478 -78,734 -92,990 -89,205 -138,539 -70,765 67,774 52 Foreign securities.............................................................. -151,916 -47,028 -22,114 -39,336 -43,438 -58,171 -30,444 -27,561 2,883 53 U.S. claims on unaffiliated foreigners reported by U.S. nonbanking concerns..... 7,421 10,932 4,382 -2,146 -5,747 -95,007 7,069 18,944 11,875 54 U.S. claims reported by U.S. banks and securities brokers....................... -515,043 -175,425 -78,721 -166,310 -94,587 -87,810 194,654 13,892 -180,762 55 Foreign-owned assets in the United States, excluding financial derivatives (increase/financial inflow (+))...................................................... 1,245,736 329,340 186,636 463,115 266,646 487,194 2,767 254,742 251,975 56 Foreign official assets in the United States........................................ 349,754 89,751 66,736 135,477 57,790 48,764 95,143 24,371 -70,772 57 U.S. government securities...................................................... 316,980 84,837 45,128 123,736 63,279 48,814 76,346 15,733 -60,613 58 U.S. Treasury securities.................................................... 397,797 97,364 31,751 188,994 79,688 33,510 79,552 31,311 -48,241 59 Other....................................................................... -80,817 -12,527 13,377 -65,258 -16,409 15,304 -3,206 -15,578 -12,372 60 Other U.S. government liabilities............................................... 12,124 4,007 2,503 1,773 3,841 2,645 2,089 2,365 276 61 U.S. liabilities reported by U.S. banks and securities brokers.................. -9,375 -16,005 3,888 10,019 -7,277 -3,073 15,319 5,041 -10,278 62 Other foreign official assets................................................... 30,025 16,912 15,217 -51 -2,053 378 1,389 1,232 -157 63 Other foreign assets in the United States........................................... 895,982 239,589 119,900 327,638 208,856 438,430 -92,376 230,371 322,747 64 Direct investment............................................................... 236,226 52,085 33,930 79,655 70,557 28,493 52,102 75,267 23,165 65 U.S. Treasury securities........................................................ 256,428 84,193 82,062 60,659 29,514 3,466 -59,320 123,814 183,134 66 U.S. securities other than U.S. Treasury securities............................. 120,453 5,421 -15,475 82,076 48,431 -2,590 -10,743 -22,962 -12,219 67 U.S. currency................................................................... 28,319 2,265 2,100 10,514 13,440 12,576 13,989 9,614 -4,375 68 U.S. liabilities to unaffiliated foreigners reported by U.S. nonbanking conerns. 77,456 27,728 21,302 11,668 16,758 42,045 24,204 -19,020 -43,224 69 U.S. liabilities reported by U.S. banks and securities brokers.................. 177,100 67,897 -4,019 83,066 30,156 354,440 -112,608 63,658 176,266 70 Financial derivatives, net............................................................. 13,735 16,152 9,980 -11,893 -504 3,220 7,504 n.a. n.a. 71 Statistical discrepancy (sum of above items with sign reversed)........................ 216,761 85,813 92,223 -44,116 82,841 -36,436 90,161 /1/ -73,627 /2/-163,788 Memoranda: 72 Balance on goods (lines 3 and 20)...................................................... -645,857 -152,832 -165,958 -167,822 -159,245 -182,222 -190,564 -181,750 8,814 73 Balance on services (lines 4 and 21)................................................... 145,830 33,189 35,435 36,709 40,496 42,250 44,359 46,170 1,811 74 Balance on goods and services (lines 2 and 19)......................................... -500,027 -119,642 -130,523 -131,113 -118,749 -139,972 -146,205 -135,580 10,625 75 Balance on income (lines 12 and 29).................................................... 165,224 36,384 43,170 45,740 39,930 52,658 56,936 58,305 1,369 76 Unilateral current transfers, net (line 35)............................................ -136,095 -35,034 -32,947 -34,754 -33,360 -32,277 -35,449 -33,006 2,443 77 Balance on current account (lines 1, 18, and 35 or lines 74, 75, and 76)............... -470,898 -118,292 -120,300 -120,127 -112,179 -119,591 -124,719 -110,281 14,438 78 Net financial flows (lines 40, 55, and 70)............................................. 254,289 32,482 28,079 164,388 29,340 156,055 35,386 /1/ 183,909 /2/ 148,523 1 Calculated excluding financial derivatives, net (line 70). 2 The change shown here is calculated as the change from the prior period, not as the sum of changes in the above items. p Preliminary r Revised n.a. Not available NOTE: Details may not add to totals because of rounding. Source: U. S. Bureau of Economic Analysis