FOR IMMEDIATE RELEASE AT 8:30 A.M. EDT, TUESDAY, SEPTEMBER 24, 2013
BEA 13-45
U.S. Net International Investment Position: End of Second Quarter 2013

The U.S. net international investment position at the end of the second quarter of 2013 was -$4,504.1 billion (preliminary) as the value of foreign investments in the United States exceeded the value of U.S. investments abroad (table 1). At the end of the first quarter, the U.S. net international investment position was -$4,236.6 billion (revised). The $267.6 billion decrease in the net position reflected a $605.8 billion decrease in the value of U.S.-owned assets abroad that exceeded a $338.2 billion decrease in the value of foreign-owned assets in the United States. The net position decreased 6 percent in the second quarter, compared with a 10-percent decrease in the first quarter and an average quarterly decrease of 8 percent from the first quarter of 2011 through the first quarter of 2013.

U.S.-owned assets abroad were $20,984.3 billion at the end of the second quarter compared with $21,590.1 billion at the end of the first quarter. The $605.8 billion decrease reflected a $423.3 billion decrease in the value of financial derivatives and a $182.5 billion decrease in the value of U.S.-owned assets abroad excluding financial derivatives.

U.S.-owned assets abroad excluding financial derivatives were $18,159.2 billion at the end of the second quarter compared with $18,341.7 billion at the end of the first quarter. The $182.5 billion decrease reflected a $292.1 billion decrease resulting from valuation changes that was partly offset by a $109.6 billion increase resulting from financial outflows.1 Valuation changes were mostly attributable to decreases in gold prices that lowered the market value of U.S. government gold and decreases in foreign stock and bond prices that lowered the value of U.S. holdings of foreign securities.

Foreign-owned assets in the United States were $25,488.4 billion at the end of the second quarter compared with $25,826.6 billion at the end of the first quarter. The $338.2 billion decrease reflected a $442.6 billion decrease in the value of financial derivatives that was partly offset by a $104.4 billion increase in the value of foreign-owned assets in the United States excluding financial derivatives.

Foreign-owned assets in the United States excluding financial derivatives were $22,722.7 billion at the end of the second quarter compared with $22,618.3 billion at the end of the first quarter. The $104.4 billion increase reflected a $179.3 billion increase resulting from financial inflows that was partly offset by a $74.9 billion decrease resulting from valuation changes. Valuation changes were mostly attributable to decreases in U.S. bond prices that were partly offset by increases in U.S. stock prices.

Revisions

The U.S. net international investment position at the end of the first quarter of 2013 was revised to -$4,236.6 billion from a previously-published value of -$4,277.1 billion. The $40.6 billion upward revision to the net position reflected a $69.1 billion downward revision to foreign-owned assets in the United States that exceeded a $28.5 billion downward revision to U.S.-owned assets abroad.

U.S.-owned assets abroad at the end of the first quarter were revised to $21,590.1 billion from $21,618.6 billion, and foreign-owned assets in the United States were revised to $25,826.6 billion from $25,895.7 billion. These revisions reflect revised source data from the Treasury International Capital (TIC) reporting system and from BEA’s quarterly surveys of direct investment.

Valuing the Components of the U.S. International Investment Position

Investment positions for long-term portfolio securities are based on market values from monthly, annual, and benchmark surveys conducted by the Treasury International Capital (TIC) reporting system of the U.S. Department of the Treasury. Investment positions for financial derivatives are based on fair market values from quarterly surveys conducted by the TIC reporting system. Investment positions for claims and liabilities reported by banks, securities brokers, and other nonbanks are based on contractual (face) values of instruments as reported by financial institutions for both their own accounts and the accounts of their customers on the monthly and quarterly surveys conducted by the TIC reporting system with supplementary data for U.S. nonbanks from foreign central banks.

Investment positions for direct investment are valued at current-period prices based on a revaluation of book values. Book values are reported by U.S. multinational companies on surveys conducted by BEA. Direct investment at current cost is BEA’s featured measure of direct investment at current-period prices.2 The current-cost method values the U.S. and foreign parent shares of their affiliates’ investment in (1) plant and equipment using the current cost of capital equipment, (2) land using general price indexes, and (3) inventories using estimates of their replacement cost.3

 

Release dates in 2013:

End of the Fourth Quarter and Year 2012 March 26, 2013 (Tuesday)
End of the First Quarter of 2013, Year 2012, and Annual Revisions June 25, 2013 (Tuesday)
End of the Second Quarter of 2013 September 24, 2013 (Tuesday)
End of the Third Quarter of 2013 December 30, 2013 (Monday)

BEA’s national, international, regional, and industry statistics; the Survey of Current Business; and BEA news releases are available without charge at www.bea.gov. At the site, you can also subscribe to receive free e-mail summaries of BEA releases and announcements.

NOTE: This news release is available on BEA’s Web site along with Quarterly Highlights related to this release, the latest detailed statistics for the U.S. international investment position, and a description of the estimation methods used to compile them. The second-quarter statistics for 2013 in this release are preliminary and will be revised on December 30, 2013.

1For statistics on financial flows, see the financial account transactions in table 1 of the U.S. International Transactions Accounts. Detailed valuation changes such as price, exchange-rate, and other changes are available only for annual statistics.

2BEA publishes direct investment at market value as an alternative current-period price measure with owners’ equity revalued using indexes of stock market prices. BEA also publishes direct investment at historical cost with owners’ equity at the book value reported on BEA’s surveys. Country and industry detail for direct investment are available only on a historical-cost basis (see www.bea.gov/iTable/index_MNC.cfm).

3For additional information on the current-cost and market-value methods, see J. Steven Landefeld and Ann M. Lawson, “Valuation of the U.S. Net International Investment Position,” Survey of Current Business 71 (May 1991): 40–49.