FOR WIRE TRANSMISSION: 10:00 A.M. EDT, TUESDAY, SEPTEMBER 10, 1996 Douglas B. Weinberg: (202) 606-9590 BEA 96-30 Recorded Message: 606-5362 U.S. International Transactions: Second Quarter 1996 Current account The U.S. current-account deficit increased to $38.8 billion in the second quarter from $34.9 billion (revised) in the first quarter, according to preliminary estimates of the Commerce Department's Bureau of Economic Analysis. An increase in the deficit on goods and services and a shift to a deficit on investment income more than offset lower net unilateral transfers. Goods and services The deficit on goods and services increased to $27.9 billion in the second quarter from $24.2 billion in the first. Goods The deficit on goods increased to $46.8 billion in the second quarter from $42.7 billion in the first. Goods exports increased to $153.3 billion from $150.0 billion. The increase was more than accounted for by a rise in nonagricultural exports. Goods imports increased to $200.1 billion from $192.8 billion. Petroleum and nonpetroleum imports increased by about the same amount. Services The surplus on services increased to $19.0 billion in the second quarter from $18.5 billion in the first. Service receipts increased to $56.0 billion from $55.1 billion. Increases in transfers under U.S. military agency sales contracts, "other" private services, and "other" transportation were partly offset by a decrease in travel. Service payments increased to $37.1 billion from $36.6 billion. Increases in "other" private services and "other" transportation were partly offset by decreases in travel and in passenger fares. Investment income Investment income transactions shifted to a deficit of $1.6 billion in the second quarter from a surplus of $0.3 billion in the first. Income receipts on U.S. assets abroad increased to $48.2 billion from $47.5 billion. The increase was accounted for by rises in direct investment receipts and "other" private receipts. Income payments on foreign assets in the United States increased to $49.8 billion from $47.2 billion. Much of the increase was accounted for by a rise in direct investment payments, which resulted from a surge in earnings. "Other" private payments and U.S. Government payments also increased. Unilateral transfers Net unilateral transfers were $9.3 billion in the second quarter, compared with $10.9 billion in the first. The decrease was more than accounted for by a decline in U.S. Government grants, which had been boosted in the first quarter by outflows displaced from the fourth quarter of 1995 by temporary Federal budget constraints. Capital transactions Net recorded capital inflows were $31.2 billion in the second quarter, compared with $30.7 billion in the first. Acquisitions of foreign assets by U.S. residents and acquisitions of U.S. assets by foreign residents slowed by nearly equal amounts. U.S. assets abroad U.S. assets abroad increased $49.2 billion in the second quarter, compared with an increase of $68.8 billion in the first. U.S. claims on foreigners reported by U.S. banks increased $5.1 billion in the second quarter, in contrast to a decrease of $1.7 billion in the first. The increase was more than accounted for by lending to home offices abroad by foreign-owned banks in the United States and lending to unaffiliated banks abroad by U.S. securities brokers and dealers. Net U.S. purchases of foreign securities were $20.1 billion in the second quarter, down from $34.4 billion in the first. Net U.S. purchases of foreign stocks decreased, but remained strong. Net U.S. purchases of foreign bonds decreased sharply as a result of shifts to net U.S. sales to residents of a few countries. Net capital outflows for U.S. direct investment abroad were $23.0 billion in the second quarter, little changed from $23.2 billion in the first. Decreases in net equity capital outflows and in reinvested earnings were nearly offset by a shift to net intercompany debt outflows. U.S. official reserve assets increased $0.5 billion in the second quarter, following almost no change in the first. Foreign assets in the United States Foreign assets in the United States increased $80.3 billion in the second quarter, compared with an increase of $99.5 billion in the first. U.S. liabilities to foreigners reported by U.S. banks, excluding U.S. Treasury securities, decreased $3.9 billion in the second quarter, following a decrease of $35.6 billion in the first. The second-quarter decrease reflected, in part, weak growth in domestic (U.S.) bank lending and an increase in U.S. banks' deposits that combined to reduce the need for funds from abroad. Net private foreign purchases of U.S. Treasury securities were $31.7 billion in the second quarter, up from $11.8 billion in the first. The step-up was more than accounted for by a shift to net purchases by investment funds in the Caribbean. Net foreign purchases of U.S. securities other than U.S. Treasury securities were $28.6 billion in the second quarter, down from $36.0 billion in the first. Net foreign purchases of U.S. bonds decreased, largely as a result of a decline in net foreign purchases of U.S. federally-sponsored agency bonds. Net foreign purchases of U.S. stocks increased. Net capital inflows for foreign direct investment in the United States were $10.7 billion in the second quarter, down from $28.7 billion in the first. The decrease was more than accounted for by a shift to net intercompany debt outflows and a decrease in net equity capital inflows; reinvested earnings increased slightly. Foreign official assets in the United States increased $13.2 billion in the second quarter, following an increase of $52.0 billion in the first. Foreign industrialized countries sharply slowed their accumulation of dollar assets, and nonindustrial countries other than OPEC members sold dollar assets. The statistical discrepancy -- errors and omissions in recorded transactions -- was an inflow of $7.6 billion in the second quarter, compared with an inflow of $4.1 billion in the first. In the second quarter, the U.S. dollar appreciated 2 percent on a trade-weighted quarterly average basis against the currencies of 10 industrial countries. * * * Release dates for 1996: Third quarter 1996......................December 10 (Tue) * * * BEA estimates are available in several forms besides the printed news releases. News releases are available at the time of public release through three subscription services offered by the Commerce Department's STAT-USA. Information on how to receive releases by FAX may be obtained by calling (202) 482-1986 (voice). Information about the Economic Bulletin Board (EBB) and about Internet services may be obtained at the same voice number and on-line, as follows: EBB (202) 482-3870 Internet http://www.stat-usa.gov In addition, BEA's most frequently requested statistical series are available on the Internet, as follows: * The Federal Statistics Briefing Room (FSBR) on the White House web site provides summary statistics for GDP and other major aggregates on its output, income, and international statistics pages. http://www.whitehouse.gov/fsbr * The FSBR provides links to BEA's national, international, and regional data. http://www.bea.doc.gov * BEA's web site provides links to detailed BEA databases on STAT-USA's Internet subscription service. http://www.stat-usa.gov Summary estimates are available on recorded messages at the time of public release at the following telephone numbers: (202) 606-5306 Gross domestic product 5303 Personal income and outlays 5362 U.S. international transactions * * * Additional data and analysis for the second quarter of 1996 will be published in the October 1996 issue of the Survey of Current Business, the monthly journal of the Bureau of Economic Analysis. The Survey is available from the Superintendent of Documents, U.S. Government Printing Office, Washington, D.C. 20402. First class mail (domestic only): annual subscription $90.00. Foreign airmail delivery rates are available upon request. Second class mail: annual subscription $49.00 domestic, $61.25 foreign; single issue $11.00 domestic, $13.75 foreign. In addition, the Survey of Current Business is now available on Internet in a searchable, retrievable electronic format at least a week before the printed version. To subscribe to STAT-USA's World Wide Web system, go to http://www.stat-usa.gov. Subscriptions for single-user unlimited access to STAT-USA's Internet information are $50.00 for 3 months or $150.00 for 1 year. For further information, call (202) 482-1986. U.S. International Transactions September 10, 1996 [Millions of dollars, seasonally adjusted] 1995 1996 Change: (Credits +, debits -) 1996 1995 I II III IV Ir IIp I-II 1 Exports of goods, services, and income ....................... 969,189 233,086 241,497 244,479 250,128 252,647 257,516 4,869 2 Goods, adjusted, excluding military 1/...................... 575,940 138,551 142,983 144,984 149,422 150,028 153,316 3,288 3 Services 2/................................................. 210,590 50,435 51,735 54,226 54,193 55,122 56,005 883 4 Transfers under U.S. military agency sales contracts ..... 13,405 3,155 3,327 3,589 3,334 3,092 3,502 410 5 Travel.................................................... 61,137 14,762 14,825 15,682 15,867 16,235 16,110 -125 6 Passenger fares........................................... 18,534 4,248 4,635 4,815 4,836 4,869 4,921 52 7 Other transportation...................................... 28,063 6,784 6,951 7,117 7,211 6,965 7,214 249 8 Royalties and license fees ............................... 26,953 6,309 6,615 7,014 7,015 7,186 7,129 -57 9 Other private services ................................... 61,724 14,989 15,247 15,743 15,744 16,501 16,879 378 10 U.S. Government miscellaneous services.................... 775 188 135 266 186 274 250 -24 11 Income receipts on U.S. assets abroad....................... 182,659 44,100 46,779 45,269 46,513 47,497 48,195 698 12 Direct investment receipts................................ 88,882 21,452 22,962 21,877 22,592 23,467 23,883 416 13 Other private receipts.................................... 89,064 21,450 22,421 22,358 22,835 22,806 23,122 316 14 U.S. Government receipts.................................. 4,713 1,198 1,396 1,034 1,086 1,224 1,190 -34 15 Imports of goods, services, and income........................-1,082,268 -263,501 -274,183 -273,175 -271,409 -276,612 -286,995 -10,383 16 Goods, adjusted, excluding military 1/...................... -749,364 -183,474 -190,910 -187,532 -187,448 -192,758 -200,146 -7,388 17 Services 2/................................................. -142,230 -35,027 -35,632 -36,013 -35,558 -36,619 -37,050 -431 18 Direct defense expenditures............................... -9,820 -2,527 -2,468 -2,469 -2,356 -2,603 -2,667 -64 19 Travel.................................................... -45,855 -11,397 -11,539 -11,377 -11,541 -12,276 -12,113 163 20 Passenger fares........................................... -14,313 -3,376 -3,658 -3,716 -3,563 -3,541 -3,470 71 21 Other transportation...................................... -29,205 -7,251 -7,380 -7,434 -7,140 -6,890 -7,103 -213 22 Royalties and license fees ............................... -6,312 -1,496 -1,508 -1,619 -1,690 -1,596 -1,612 -16 23 Other private services ................................... -33,970 -8,242 -8,448 -8,698 -8,582 -9,022 -9,385 -363 24 U.S. Government miscellaneous services.................... -2,755 -738 -631 -700 -686 -691 -700 -9 25 Income payments on foreign assets in the United States...... -190,674 -45,000 -47,641 -49,630 -48,403 -47,235 -49,799 -2,564 26 Direct investment payments................................ -31,418 -7,113 -7,988 -9,062 -7,255 -6,949 -8,346 -1,397 27 Other private payments.................................... -97,977 -23,648 -24,592 -24,761 -24,976 -24,122 -24,621 -499 28 U.S. Government payments.................................. -61,279 -14,239 -15,061 -15,807 -16,172 -16,164 -16,832 -668 29 Unilateral transfers, net..................................... -35,075 -8,639 -8,290 -8,992 -9,154 -10,904 -9,300 1,604 30 U.S. Government grants ..................................... -10,959 -2,846 -2,381 -2,933 -2,799 -4,259 -2,274 1,985 31 U.S. Government pensions and other transfers................ -3,420 -758 -967 -964 -731 -960 -1,025 -65 32 Private remittances and other transfers .................... -20,696 -5,035 -4,942 -5,095 -5,624 -5,685 -6,001 -316 U.S. International Transactions (Continued) September 10, 1996 [Millions of dollars, seasonally adjusted] 1995 1996 Change: (Credits +, debits -) 1996 1995 I II III IV Ir IIp I-II 33 U.S. assets abroad, net (increase/capital outflow (-))..................-307,856 -61,747 -108,299 -39,595 -98,214 -68,750 -49,165 19,585 34 U.S. official reserve assets, net .................................... -9,742 -5,318 -2,722 -1,893 191 17 -523 -540 35 Gold................................................................ .... .... .... .... .... .... .... .... 36 Special drawing rights.............................................. -808 -867 -156 362 -147 -199 -133 66 37 Reserve position in the International Monetary Fund................. -2,466 -526 -786 -991 -163 -849 -220 629 38 Foreign currencies.................................................. -6,468 -3,925 -1,780 -1,264 501 1,065 -170 -1,235 39 U.S. Government assets, other than official reserve assets, net....... -280 -154 -179 252 -199 -152 -429 -277 40 U.S. credits and other long-term assets............................. -4,640 -1,612 -815 -1,014 -1,199 -1,010 -1,498 -488 41 Repayments on U.S. credits and other long-term assets .............. 4,258 1,063 647 1,523 1,025 1,005 840 -165 42 U.S. foreign currency holdings and U.S. short-term assets, net...... 102 395 -11 -257 -25 -147 229 376 43 U.S. private assets, net..............................................-297,834 -56,275 -105,398 -37,954 -98,206 -68,615 -48,213 20,402 44 Direct investment................................................... -95,509 -15,053 -18,247 -18,091 -44,117 -23,202 -22,983 219 45 Foreign securities.................................................. -98,960 -7,571 -23,011 -35,839 -32,539 -34,420 -20,081 14,339 46 U.S. claims on unaffiliated foreigners reported by U.S. nonbanking concerns....................................................... -34,219 -4,537 -22,904 7,500 -14,278 -12,707 n.a. n.a. 47 U.S. claims reported by U.S. banks, not included elsewhere.......... -69,146 -29,114 -41,236 8,476 -7,272 1,714 -5,149 -6,863 48 Foreign assets in the United States, net (increase/capital inflow(+))... 424,462 90,995 115,421 118,816 99,229 99,471 80,315 -19,156 49 Foreign official assets in the United States, net..................... 109,757 21,822 37,380 39,186 11,369 52,021 13,197 -38,824 50 U.S. Government securities.......................................... 72,547 11,258 26,534 21,007 13,748 55,652 -2,126 -57,778 51 U.S. Treasury securities ......................................... 68,813 10,132 25,208 20,489 12,984 55,600 -3,384 -58,984 52 Other............................................................. 3,734 1,126 1,326 518 764 52 1,258 1,206 53 Other U.S. Government liabilities .................................. 1,082 -331 235 -71 1,249 -156 197 353 54 U.S. liabilities reported by U.S. banks, not included elsewhere..... 32,862 10,630 7,662 18,478 -3,908 -3,264 13,841 17,105 55 Other foreign official assets ...................................... 3,266 265 2,949 -228 280 -211 1,285 1,496 56 Other foreign assets in the United States, net........................ 314,705 69,173 78,041 79,630 87,860 47,450 67,118 19,668 57 Direct investment................................................... 60,236 10,788 9,692 24,987 14,768 28,690 10,733 -17,957 58 U.S. Treasury securities............................................ 99,340 29,969 30,368 37,269 1,734 11,832 31,680 19,848 59 U.S. securities other than U.S. Treasury securities................. 95,268 15,480 20,496 31,971 27,321 35,993 28,567 -7,426 60 U.S. liabilities to unaffiliated foreigners reported by U.S. nonbanking concerns............................................ 34,578 9,076 7,285 6,945 11,272 6,506 n.a. n.a. 61 U.S. liabilities reported by U.S. banks, not included elsewhere..... 25,283 3,860 10,200 -21,542 32,765 -35,571 -3,862 31,709 62 Allocations of special drawing rights................................... .... .... .... .... .... .... .... .... 63 Statistical discrepancy (sum of above items with sign reversed)......... 31,548 9,806 33,854 -41,533 29,420 4,148 7,629 3,481 Of which seasonal adjustment discrepancy.............................. .... 6,519 -266 -7,407 1,153 6,279 -743 -7,022 Memoranda: 64 Balance on goods (lines 2 and 16).......................................-173,424 -44,923 -47,927 -42,548 -38,026 -42,730 -46,830 -4,100 65 Balance on services (lines 3 and 17).................................... 68,360 15,408 16,103 18,213 18,635 18,503 18,955 452 66 Balance on goods and services (lines 64 and 65).........................-105,064 -29,515 -31,824 -24,335 -19,391 -24,227 -27,875 -3,648 67 Balance on investment income (lines 11 and 25).......................... -8,016 -900 -862 -4,361 -1,890 262 -1,604 -1,866 68 Balance on goods, services, and income (lines 1 and 15 or lines 66 and 67) ..............................................................-113,079 -30,415 -32,686 -28,696 -21,281 -23,965 -29,479 -5,514 69 Unilateral transfers, net (line 29)..................................... -35,075 -8,639 -8,290 -8,992 -9,154 -10,904 -9,300 1,604 70 Balance on current account (lines 1, 15, and 29 or lines 68 and 69) ....-148,154 -39,054 -40,976 -37,688 -30,435 -34,869 -38,779 -3,910 r Revised. p Preliminary. n.a. not available. 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