News Release

EMBARGOED UNTIL RELEASE AT 8:30 A.M. EDT, Tuesday, September 19, 2017
BEA 17-47

U.S. International Transactions, 2nd quarter 2017

                                    Current-Account Balance

The U.S. current-account deficit increased to $123.1 billion (preliminary) in the second
quarter of 2017 from $113.5 billion (revised) in the first quarter of 2017, according to
statistics released by the Bureau of Economic Analysis (BEA). The deficit increased to 2.6
percent of current-dollar gross domestic product (GDP) from 2.4 percent in the first quarter.

The $9.6 billion increase in the current-account deficit reflected a $7.5 billion increase in
the deficit on secondary income, a $2.9 billion decrease in the surplus on primary income, and
a $0.8 billion increase in the deficit on goods. These changes were partly offset by a $1.6
billion increase in the surplus on services.

The remainder of this release highlights changes from the first quarter to the second quarter
in major aggregates of the U.S. international transactions accounts, selected component
contributions to those changes, and updates to previously published statistics for the first
quarter.

                           Current-Account Transactions (tables 1-5)

Exports of goods and services and income receipts

Exports of goods and services and income receipts increased $2.2 billion in the second quarter
to $836.8 billion.

   * Primary income receipts increased $4.8 billion to $224.1 billion, mostly reflecting
     increases in portfolio investment income and in other investment income.

   * Services exports increased $3.2 billion to $195.8 billion, mostly reflecting increases in
     travel (for all purposes including education) and in financial services.

   * Secondary income receipts decreased $5.2 billion to $33.9 billion, partly offsetting the
     increases in primary income receipts and services exports. The decrease in secondary
     income receipts mostly reflected a decrease in U.S. government transfers, primarily fines
     and penalties.

Imports of goods and services and income payments

Imports of goods and services and income payments increased $11.8 billion to $959.9 billion.

   * Primary income payments increased $7.6 billion to $176.9 billion, reflecting increases in
     direct, portfolio, and other investment income.

   * Secondary income payments increased $2.4 billion to $66.9 billion, mostly reflecting an
     increase in private transfers, primarily fines and penalties.

   * Services imports increased $1.6 billion to $131.8 billion, led by an increase in travel
     (for all purposes including education).

                           Financial Account (tables 1, 6, 7, and 8)

Net U.S. borrowing measured by financial-account transactions was $112.5 billion in the second
quarter of 2017, an increase from net borrowing of $93.5 billion in the first quarter. The
increase reflected an increase in net U.S. incurrence of liabilities excluding financial
derivatives that was partly offset by an increase in net U.S. acquisition of financial assets
excluding financial derivatives and a shift to net lending from net borrowing in financial
derivatives other than reserves.

Financial assets

Net U.S. acquisition of financial assets excluding financial derivatives increased $24.6
billion in the second quarter to $350.7 billion.

   * Net U.S. acquisition of portfolio investment assets increased $41.3 billion to $181.7
     billion, reflecting an increase in net U.S. purchases of equity and investment fund shares.

   * Net U.S. acquisition of direct investment assets decreased $17.9 billion to $99.5 billion,
     partly offsetting the increase in net acquisition of portfolio investment assets. The
     decrease in net acquisition of direct investment assets mostly reflected a decrease in net
     acquisition of debt instruments by U.S. parent companies from their foreign affiliates.

Liabilities

Net U.S. incurrence of liabilities excluding financial derivatives increased $55.2 billion to
$472.5 billion.

   * Net U.S. incurrence of portfolio investment liabilities increased $143.0 billion to $307.5
     billion, reflecting an increase in net foreign purchases of U.S. debt securities.

   * Net U.S. incurrence of other investment liabilities decreased $71.6 billion to $84.0
     billion, partly offsetting the increase in net incurrence of portfolio investment
     liabilities. The decrease reflected a shift to net U.S. repayment of loans from first-
     quarter net incurrence.

Financial derivatives

Transactions in financial derivatives other than reserves reflected second-quarter net lending
of $9.3 billion, a shift from first-quarter net borrowing of $2.3 billion.

                               Statistical Discrepancy (table 1)

The statistical discrepancy decreased $9.4 billion in the second quarter to $10.6 billion.

         Updates to First Quarter 2017 International Transactions Accounts Aggregates
                           Billions of dollars, seasonally adjusted

                                                      Preliminary estimate    Revised estimate
Current-account balance                                       -116.8               -113.5
Goods balance                                                 -200.3               -200.6
   Services balance                                             61.3                 62.5
   Primary-income balance                                       47.7                 50.1
   Secondary-income balance                                    -25.5                -25.5
Net lending (+)/borrowing (-) from
   financial-account transactions                             -115.3                -93.5
Statistical discrepancy                                          1.5                 20.0


                       Next release:  December 19, 2017 at 8:30 A.M. EST
                      U.S. International Transactions, Third Quarter 2017