FOR WIRE TRANSMISSION: 10:00 A.M. EDT, THURSDAY, SEPTEMBER 10, 1998
Douglas B. Weinberg: (202) 606-9590 BEA 98-28
Recorded Message: 606-5362
U.S. International Transactions: Second Quarter 1998
Current account
The U.S. current-account deficit--the combined balances on trade in goods
and services, investment income, and net unilateral transfers--increased to
$56.5 billion in the second quarter from $46.7 billion (revised) in the
first, according to preliminary estimates of the Commerce Department's
Bureau of Economic Analysis. The deficits on goods and services and on
investment income both increased, and net unilateral transfers decreased.
Goods and services
The deficit on goods and services increased to $44.0 billion in the second
quarter from $35.0 billion in the first.
Goods The deficit on goods increased to $64.8 billion in the second quarter
from $55.7 billion in the first.
Goods exports decreased to $164.7 billion from $171.5 billion. The
decrease was broad- based by commodity type.
Goods imports increased to $229.5 billion from $227.2 billion. The
increase was more than accounted for by a rise in nonpetroleum imports that
reflected an increase in consumer goods. Petroleum imports decreased as a
result of a decline in petroleum prices.
Services The surplus on services increased to $20.9 billion in the second
quarter from $20.7 billion in the first.
Service receipts increased to $65.5 billion from $65.1 billion. The
increase was more than accounted for by increases in "other" private
services and in travel; a decrease in transfers under U.S. military agency
sales contracts was partly offsetting.
Service payments increased to $44.6 billion from $44.4 billion. Increases
in "other" private services, in "other" transportation, and in travel more
than offset a decrease in royalties and license fees.
Investment income
The deficit on investment income increased to $3.2 billion in the second
quarter from $2.2 billion in the first.
Income receipts on U.S. assets abroad were unchanged at $62.5 billion.
Increases in direct investment receipts and in U.S. Government receipts
offset a decrease in "other" private receipts.
Income payments on foreign assets in the United States increased to $65.7
billion from $64.8 billion. Much of the increase was accounted for by an
increase in direct investment payments.
Unilateral transfers
Net unilateral transfers were $9.3 billion in the second quarter, compared
with $9.5 billion in the first. The decrease was more than accounted for
by a decrease in U.S. Government grants.
Capital transactions
Net recorded capital inflows--the difference between changes in U.S.
assets abroad and changes in foreign assets in the United States--were
$65.9 billion in the second quarter, compared with $49.9 billion (revised)
in the first. Capital inflows for foreign assets in the United States
accelerated more than capital outflows for U.S. assets abroad.
U.S. assets abroad
U.S. assets abroad increased $97.5 billion in the second quarter after an
increase of $45.6 billion in the first.
Much of the step-up was accounted for by changes in U.S. claims on
foreigners reported by U.S. banks, which increased $25.0 billion in the
second quarter, compared with a decrease of $3.1 billion in the first. The
increase was partly attributable to a step-up in U.S. bank lending to
Western Europe.
Net U.S. purchases of foreign securities were $23.4 billion in the second
quarter, up from $7.0 billion in the first. The step-up was more than
accounted for by an increase in net U.S. purchases of foreign bonds.
Net capital outflows for U.S. direct investment abroad were $40.3 billion
in the second quarter, up from $34.3 billion in the first. Increases in
net equity capital outflows and in reinvested earnings were partly offset
by a decrease in net intercompany debt outflows.
U.S. official reserve assets increased $1.9 billion in the second quarter
after an increase of $0.4 billion in the first.
Foreign assets in the United States
Foreign assets in the United States increased $163.4 billion in the second
quarter after an increase of $95.5 billion in the first.
The step-up was more than accounted for by changes in U.S. liabilities to
foreigners reported by U.S. banks, excluding U.S. Treasury securities,
which increased $40.9 billion in the second quarter, compared with a
decrease of $50.5 billion in the first. The increase in the second quarter
partly reflected the resumption of borrowing to support lending activity
abroad, following the large repayment of funds by U.S. banks in the first
quarter.
Private transactions in U.S. Treasury securities shifted to net foreign
purchases of $25.7 billion in the second quarter from net foreign sales of
$1.7 billion in the first. The shift was more than accounted for by a
shift to net purchases from net sales by international bond mutual funds in
the Caribbean.
Net U.S. currency shipments were $2.3 billion in the second quarter, up
from $0.7 billion in the first.
Net foreign purchases of U.S. securities other than U.S. Treasury
securities were $69.5 billion in the second quarter, down from $77.0
billion in the first. The decline was more than accounted for by a drop in
net foreign purchases of U.S. stocks. Net foreign purchases of U.S.
corporate and other bonds increased to a record level.
Net capital inflows for foreign direct investment in the United States were
$22.0 billion in the second quarter, down from $25.9 billion in the first.
Net equity capital inflows, reinvested earnings, and net intercompany debt
inflows all decreased.
Foreign official assets in the United States decreased $10.5 billion in the
second quarter, compared with an increase of $11.3 billion in the first.
Most of the decrease in the second quarter was accounted for by a decrease
in the assets of industrial countries.
The statistical discrepancy--errors and omissions in recorded
transactions--was a negative $9.4 billion in the second quarter, compared
with a negative $3.1 billion in the first.
In the second quarter, the U.S. dollar was unchanged on a trade-weighted
quarterly average basis against the currencies of 10 industrial countries.
Revisions
The first-quarter current-account balance and its components are revised
from the previously published estimates. The current-account deficit for
the first quarter was revised to $46.7 billion from $47.2 billion. The
goods deficit was unrevised at $55.7 billion; the services surplus was
revised to $20.7 billion from $20.8 billion; the deficit on investment
income was revised to $2.2 billion from $3.1 billion; and net unilateral
transfers were revised to $9.5 billion from $9.2 billion.
* * *
Release dates for 1998:
Third quarter 1998......................December 9 (Wed)
* * *
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Summary estimates are available on recorded messages at the time of public
release at the following telephone numbers:
(202) 606-5362 U.S. international transactions
606-5306 Gross domestic product
606-5303 Personal income and outlays
Most of BEA's estimates and analyses appear in the Survey of Current
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available from the Superintendent of Documents, U.S. Government Printing
Office, Washington, D.C. 20402. First class mail: Annual subscription
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U.S. International Transactions September 10, 1998
[Millions of dollars, quarters seasonally adjusted]
1997 1998 Change:
(Credits +, debits -) 1997 1998
I II III IV Ir IIp I-II
1 Exports of goods, services, and income ............................... 1,179,380 283,765 295,287 300,481 299,843 299,061 292,591 -6,470
2 Goods, adjusted, excluding military 1/.............................. 679,325 163,499 169,240 172,302 174,284 171,469 164,666 -6,803
3 Services 2/......................................................... 258,268 62,685 64,776 65,628 65,175 65,070 65,467 397
4 Transfers under U.S. military agency sales contracts ............. 18,269 4,338 4,890 4,883 4,158 4,672 4,086 -586
5 Travel............................................................ 73,268 18,197 18,542 18,325 18,204 17,967 18,235 268
6 Passenger fares................................................... 20,895 5,130 5,189 5,212 5,364 5,198 5,287 89
7 Other transportation.............................................. 26,911 6,698 6,724 6,678 6,809 6,460 6,392 -68
8 Royalties and license fees ....................................... 33,676 8,306 8,407 8,580 8,381 8,675 8,872 197
9 Other private services ........................................... 84,465 19,813 20,833 21,750 22,069 21,903 22,398 495
10 U.S. Government miscellaneous services............................. 784 203 191 200 190 195 197 2
11 Income receipts on U.S. assets abroad............................... 241,787 57,581 61,271 62,551 60,384 62,522 62,458 -64
12 Direct investment receipts........................................ 109,407 26,716 28,286 28,935 25,470 26,391 26,525 134
13 Other private receipts............................................ 128,845 30,018 32,041 32,717 34,069 35,302 35,001 -301
14 U.S. Government receipts.......................................... 3,535 847 944 899 845 829 932 103
15 Imports of goods, services, and income................................-1,294,904 -311,881 -321,342 -329,130 -332,549 -336,316 -339,782 -3,466
16 Goods, adjusted, excluding military 1/.............................. -877,279 -213,222 -218,336 -221,598 -224,123 -227,167 -229,497 -2,330
17 Services 2/......................................................... -170,520 -41,092 -42,195 -43,437 -43,795 -44,379 -44,589 -210
18 Direct defense expenditures....................................... -11,488 -2,796 -2,699 -2,938 -3,055 -3,145 -3,050 95
19 Travel............................................................ -51,220 -12,736 -12,764 -12,897 -12,823 -13,309 -13,422 -113
20 Passenger fares................................................... -18,235 -4,311 -4,663 -4,704 -4,557 -4,650 -4,709 -59
21 Other transportation.............................................. -28,949 -7,034 -7,317 -7,200 -7,397 -7,250 -7,389 -139
22 Royalties and license fees ....................................... -9,411 -2,106 -2,168 -2,559 -2,578 -2,850 -2,467 383
23 Other private services ........................................... -48,421 -11,423 -11,905 -12,409 -12,684 -12,471 -12,846 -375
24 U.S. Government miscellaneous services............................ -2,796 -686 -679 -730 -701 -704 -706 -2
25 Income payments on foreign assets in the United States.............. -247,105 -57,567 -60,811 -64,095 -64,631 -64,770 -65,696 -926
26 Direct investment payments........................................ -45,674 -10,664 -10,887 -12,548 -11,574 -10,802 -11,270 -468
27 Other private payments............................................ -113,959 -26,705 -28,023 -28,849 -30,382 -31,285 -31,466 -181
28 U.S. Government payments.......................................... -87,472 -20,198 -21,901 -22,698 -22,675 -22,683 -22,960 -277
29 Unilateral transfers, net............................................. -39,691 -8,874 -9,035 -9,445 -12,337 -9,480 -9,334 146
30 U.S. Government grants ............................................. -12,090 -2,241 -2,274 -2,362 -5,213 -2,266 -2,060 206
31 U.S. Government pensions and other transfers........................ -4,193 -1,013 -1,055 -1,056 -1,069 -1,126 -1,130 -4
32 Private remittances and other transfers ............................ -23,408 -5,620 -5,706 -6,027 -6,055 -6,088 -6,144 -56
33 U.S. assets abroad, net (increase/capital outflow (-))................ -478,502 -145,139 -86,606 -123,317 -123,441 -45,648 -97,490 -51,842
34 U.S. official reserve assets, net .................................. -1,010 4,480 -236 -730 -4,524 -444 -1,945 -1,501
35 Gold.............................................................. .... .... .... .... .... .... .... ....
36 Special drawing rights............................................ -350 72 -133 -139 -150 -182 72 254
37 Reserve position in the International Monetary Fund............... -3,575 1,055 54 -463 -4,221 -85 -1,031 -946
38 Foreign currencies................................................ 2,915 3,353 -157 -128 -153 -177 -986 -809
39 U.S. Government assets, other than official reserve assets, net..... 174 -22 -269 436 29 -388 -496 -108
40 U.S. credits and other long-term assets........................... -5,302 -1,168 -1,616 -1,421 -1,097 -1,189 -1,159 30
41 Repayments on U.S. credits and other long-term assets ............ 5,504 1,171 1,358 1,878 1,097 1,177 721 -456
42 U.S. foreign currency holdings and U.S. short-term assets, net.... -28 -25 -11 -21 29 -376 -58 318
43 U.S. private assets, net............................................ -477,666 -149,597 -86,101 -123,023 -118,946 -44,816 -95,049 -50,233
44 Direct investment................................................. -121,843 -32,498 -26,388 -27,488 -35,470 -34,321 -40,261 -5,940
45 Foreign securities................................................ -87,981 -15,521 -23,263 -41,167 -8,030 -6,973 -23,446 -16,473
46 U.S. claims on unaffiliated foreigners reported by
U.S. nonbanking concerns.................................... -120,403 -37,880 -9,825 -24,791 -47,907 -6,596 -6,363 233
47 U.S. claims reported by U.S. banks, not included elsewhere........ -147,439 -63,698 -26,625 -29,577 -27,539 3,074 -24,979 -28,053
48 Foreign assets in the United States, net (increase/capital inflow(+)). 733,441 181,735 149,773 181,438 220,491 95,529 163,425 67,896
49 Foreign official assets in the United States, net................... 15,817 26,949 -5,411 21,258 -26,979 11,324 -10,483 -21,807
50 U.S. Government securities........................................ -2,936 23,065 -10,862 9,353 -24,492 13,946 -20,063 -34,009
51 U.S. Treasury securities ....................................... -7,270 22,311 -11,689 6,686 -24,578 11,336 -20,317 -31,653
52 Other........................................................... 4,334 754 827 2,667 86 2,610 254 -2,356
53 Other U.S. Government liabilities ................................ -2,521 -587 -523 -1,167 -244 -1,059 -422 637
54 U.S. liabilities reported by U.S. banks, not included elsewhere... 21,928 7,696 5,043 12,439 -3,250 -607 9,170 9,777
55 Other foreign official assets .................................... -654 -3,225 931 633 1,007 -956 832 1,788
56 Other foreign assets in the United States, net...................... 717,624 154,786 155,184 160,180 247,470 84,205 173,908 89,703
57 Direct investment................................................. 93,449 25,879 20,149 18,964 28,453 25,931 22,036 -3,895
58 U.S. Treasury securities.......................................... 146,710 33,363 42,614 35,432 35,301 -1,701 25,715 27,416
59 U.S. currency..................................................... 24,782 3,484 4,822 6,576 9,900 746 2,349 1,603
60 U.S. securities other than U.S. Treasury securities............... 196,845 45,477 54,258 60,327 36,783 77,019 69,531 -7,488
61 U.S. liabilities to unaffiliated foreigners reported by U.S.
nonbanking concerns......................................... 107,779 28,840 5,274 26,275 47,390 32,707 13,389 -19,318
62 U.S. liabilities reported by U.S. banks, not included elsewhere... 148,059 17,743 28,067 12,606 89,643 -50,497 40,888 91,385
63 Allocations of special drawing rights................................. .... .... .... .... .... .... .... ....
64 Statistical discrepancy (sum of above items with sign reversed)....... -99,724 394 -28,077 -20,027 -52,007 -3,146 -9,410 -6,264
Of which seasonal adjustment discrepancy............................ .... 5,812 685 -10,018 3,528 6,217 1,562 -4,655
Memoranda:
65 Balance on goods (lines 2 and 16)..................................... -197,954 -49,723 -49,096 -49,296 -49,839 -55,698 -64,831 -9,133
66 Balance on services (lines 3 and 17).................................. 87,748 21,593 22,581 22,191 21,380 20,691 20,878 187
67 Balance on goods and services (lines 65 and 66)....................... -110,206 -28,130 -26,515 -27,105 -28,459 -35,007 -43,953 -8,946
68 Balance on investment income (lines 11 and 25)........................ -5,318 14 460 -1,544 -4,247 -2,248 -3,238 -990
69 Balance on goods, services, and income (lines 1 and 15 or lines 67
and 68) ............................................................ -115,524 -28,116 -26,055 -28,649 -32,706 -37,255 -47,191 -9,936
70 Unilateral transfers, net (line 29)................................... -39,691 -8,874 -9,035 -9,445 -12,337 -9,480 -9,334 146
71 Balance on current account (lines 1, 15, and 29 or lines 69 and 70) .. -155,215 -36,990 -35,090 -38,094 -45,043 -46,735 -56,525 -9,790
r Revised. p Preliminary.
1. Adjusted for timing, valuation, and coverage to balance of payments basis; excludes exports under U. S. military agency sales
contracts and imports of U. S. military agencies.
2. Includes some goods that cannot be separately identified from services.
NOTE:--Details may not add to totals because of rounding. Source: U. S. Department of Commerce, Bureau of Economic Analysis