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U.S. International Transactions, 2nd quarter 2011

Mon, 09/19/2011 - 4:22am
U.S. Bureau of Economic Analysis

The U.S. current-account deficit?the combined balances on trade in goods and services, income, and net unilateral current transfers?decreased to $118.0 billion (preliminary) in the second quarter of 2011, from $119.6 billion (revised) in the first quarter. The decrease was more than accounted for by increases in the surplus on income and the surplus on services. Increases in the deficit on goods and in net unilateral current transfers were partly offsetting. Goods and services The deficit on goods and services increased to $145.0 billion in the second quarter from $140.0 billion in the first. Goods The deficit on goods increased to $190.4 billion in the second quarter from $182.2 billion in the first. Goods exports increased to $373.1 billion from $361.5 billion. All major end-use categories increased; industrial supplies and materials and capital goods accounted for most of the increase. The increase in industrial supplies and materials mostly reflected growth in petroleum and products and in chemicals. Capital goods increased largely as a result of gains in machinery and equipment (Table 2a). Goods imports increased to $563.5 billion from $543.8 billion. Most major end-use categories increased; nearly three-fourths of the increase was accounted for by increases in industrial supplies and materials, mostly as a result of growth in petroleum and products and in iron and steel products. Capital goods rose as a result of growth in computers, peripherals, and parts. A decrease in automotive vehicles, parts, and engines, primarily due to a drop in passenger cars, was partly offsetting (Table 2a). Services The surplus on services increased to $45.4 billion in the second quarter from $42.3 billion in the first. Services receipts increased to $150.7 billion from $146.0 billion. The largest increases were in travel and in other private services. Most of the other services categories also increased. Services payments increased to $105.2 billion from $103.8 billion. The largest increases were in travel, in other transportation, and in other private services. Income The surplus on income increased to $61.1 billion in the second quarter from $52.7 billion in the first. Investment income Income receipts on U.S.-owned assets abroad increased to $191.6 billion from $178.9 billion. The increase was mostly accounted for by increases in direct investment receipts and in other private receipts (which consists of interest and dividends). Income payments on foreign-owned assets in the United States increased to $128.2 billion from $124.0 billion. Most of the increase was accounted for by an increase in direct investment payments. 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 $34.2 billion in the second quarter, up from $32.3 billion in the first. The increase was more than accounted for by an increase in U.S. government grants. Capital Account Net capital account payments were $0.8 billion in the second quarter, up from near zero over the previous two quarters. Financial Account Net financial inflows were $25.7 billion in the second quarter, down from $156.1 billion in the first. The slowdown resulted from a steep reduction in the growth of foreign-owned assets in the United States that more than offset a reversal from an increase to a decrease in U.S.-owned assets abroad. U.S.-owned assets abroad U.S.-owned assets abroad decreased $22.9 billion in the second quarter, following an increase of $334.4 billion in the first. U.S. claims on foreigners reported by U.S. banks and securities brokers decreased $195.7 billion in the second quarter, following an increase of $87.8 billion in the first. (Examples of these claims are U.S. banks? deposits at foreign banks and U.S. banks? loans to foreigners.) Most of the decrease resulted from a substantial decrease in claims for own accounts, particularly in deposits abroad (Table 10a). Net U.S. purchases of foreign securities were $30.1 billion in the second quarter, following net purchases of $58.2 billion in the first. Net purchases of foreign stocks slowed to $26.7 billion from $47.1 billion. Net purchases of foreign bonds were $3.4 billion, down from $11.0 billion (Table 8a). U.S. direct investment abroad was $134.1 billion in the second quarter, up from $89.2 billion in the first. The increase resulted in large part from increases in equity investment, along with smaller increases in intercompany debt investment and reinvested earnings (Table 7a). U.S. claims on unaffiliated foreigners reported by U.S. nonbanking concerns increased $0.9 billion in the second quarter, following an increase of $95.0 billion in the first. U.S. official reserve assets increased $6.3 billion in the second quarter, following an increase of $3.6 billion in the first. The increase was mostly a result of an increase in the reserve position in the International Monetary Fund. U.S. government assets other than official reserve assets increased $1.4 billion in the second quarter, following an increase of $0.5 billion in the first. Foreign-owned assets in the United States Foreign-owned assets in the United States increased $2.8 billion in the second quarter, following an increase of $487.2 billion in the first. U.S. liabilities to foreigners reported by U.S. banks and securities brokers (other than foreign official assets) decreased $101.0 billion in the second quarter, following an increase of $354.4 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.) All of the decrease resulted from a decline in liabilities for own accounts, particularly in loan positions from foreigners (Table 11a). Net private foreign sales of U.S. Treasury securities were $63.8 billion in the second quarter, a shift from net purchases of $3.5 billion in the first. Net private foreign sales of U.S. securities other than U.S. Treasury securities were $9.5 billion in the second quarter, up from $2.6 billion in the first. Net foreign sales of U.S. federally sponsored agency bonds were $23.3 billion in the second quarter, down from $32.5 billion in the first. Net foreign sales of U.S. corporate bonds were $13.9 billion, up from $4.3 billion. Net foreign purchases of U.S. stocks decreased to $27.7 billion from $34.2 billion (Table 8a). Foreign direct investment in the United States was $47.7 billion in the second quarter, following investment of $28.5 billion in the first. Nearly all of the increase resulted from increases in equity investment (Table 7a). U.S. liabilities to unaffiliated foreigners reported by U.S. nonbanking concerns increased $20.8 billion in the second quarter, following an increase of $42.0 billion in the first. Foreign official assets in the United States increased $94.6 billion in the second quarter, following an increase of $48.8 billion in the first. The increase was mostly due to net purchases of U.S. Treasury securities. Net shipments of U.S. currency to foreign countries were $14.0 billion in the second quarter, up from $12.6 billion in the first. The statistical discrepancy?net errors and omissions in recorded transactions?was $93.1 billion in the second quarter compared with -$36.4 billion in the first. In the second quarter, the U.S. dollar depreciated 1.7 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 2011 international transactions are revised from previously published statistics. The current-account deficit was revised up to $119.6 billion from $119.3 billion. The goods deficit was revised down to $182.2 billion from $182.5 billion; the services surplus was revised up to $42.3 billion from $41.7 billion; the income surplus was revised down to $52.7 billion from $54.8 billion; and net outflows of unilateral current transfers were revised down to $32.3 billion from $33.2 billion. Net financial inflows were revised to $156.1 billion from $181.9 billion. * * * Release dates in 2011: Fourth quarter and year 2010.................March 16, 2011 (Wednesday) First quarter 2011.............................June 16, 2011 (Thursday) Second quarter 2011.......................September 15, 2011 (Thursday) Third quarter 2011.........................December 15, 2011 (Thursday) * * * 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.

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