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News Release: U.S. International Transactions

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FOR WIRE TRANSMISSION: 8:30 A.M. EST, MONDAY, December 18, 2006

Douglas B. Weinberg:        (202) 606-9590                            BEA 06-56


           U.S. International Transactions: Third Quarter 2006

                             Current Account

        The U.S. current-account deficit--the combined balances on trade in
goods and services, income, and net unilateral current transfers--increased to
$225.6 billion (preliminary) in the third quarter of 2006 from $217.1 billion
(revised) in the second quarter.  The increase was more than accounted for by
increases in the deficits on goods and on income.  The surplus on services
increased, and net unilateral current transfers to foreigners decreased.

Goods and services

        The deficit on goods and services increased to $200.3 billion in the
third quarter from $193.1 billion in the second.

        Goods

        The deficit on goods increased to $218.6 billion in the third quarter
from $210.6 billion in the second.

        Goods exports increased to $262.1 billion from $252.8 billion.  The
increase resulted from increases in all major commodity categories.

        Goods imports increased to $480.7 billion from $463.4 billion.  The
increase resulted from increases in petroleum and products and in most major
categories of nonpetroleum products.

        Services

        The surplus on services increased to $18.3 billion in the third quarter
from $17.5 billion in the second.

        Services receipts increased to $104.0 billion from $103.1 billion.  The
increase was more than accounted for by an increase in “other” private services
(such as business, professional, and technical services, insurance services,
and financial services).  Most other services categories changed little.

        Services payments edged up to $85.7 billion from $85.6 billion.
Increases in “other” private services and in “other” transportation (such as
freight and port services) were largely offset by decreases in travel and in
passenger fares.

Income

        The deficit on income increased to $3.8 billion in the third quarter
from $2.2 billion in the second.

        Investment income

        Income receipts on U.S.-owned assets abroad increased to $160.1 billion
from $155.3 billion.  The increase was largely accounted for by an increase in
“other” private receipts (which consists of interest and dividends).  Direct
investment receipts also increased.

        Income payments on foreign-owned assets in the United States increased
to $162.2 billion from $155.8 billion.  Direct investment payments, “other”
private payments (which consists of interest and dividends), and U.S.
Government payments (which consists of interest) all increased.

        Compensation of employees

        Receipts for compensation of U.S. workers abroad were virtually
unchanged at $0.7 billion, and payments for compensation of foreign workers in
the United States also were virtually unchanged at $2.4 billion.

Unilateral current transfers

        Net unilateral current transfers to foreigners were $21.5 billion in
the third quarter, down from $21.9 billion in the second.  The decrease was
more than accounted for by a decrease in private remittances and other
transfers.

                         Capital and Financial Account

                                Capital Account

        Net capital account payments (outflows) were $0.6 billion in the third
quarter, down from $1.0 billion in the second.

                               Financial Account

        Net financial inflows--net acquisitions by foreign residents of assets
in the United States less net acquisitions by U.S. residents of assets abroad--
were $176.4 billion in the third quarter, up from $153.2 billion in the second.
Net acquisitions by foreign residents strengthened more than net acquisitions
by U.S. residents.

U.S.-owned assets abroad

        U.S.-owned assets abroad increased $223.8 billion in the third quarter,
following an increase of $211.4 billion in the second.

        U.S. claims on foreigners reported by U.S. banks increased $85.7
billion in the third quarter, following an increase of $80.7 billion in the
second.

        Net U.S. purchases of foreign securities were $53.0 billion in the
third quarter, down slightly from $53.9 billion in the second.  Net U.S.
purchases of foreign stocks were $8.0 billion, down from $17.0 billion.
Net U.S. purchases of foreign bonds were $45.1 billion, up from $36.9 billion.

        U.S. direct investment abroad increased $63.1 billion in the third
quarter, following an increase of $46.8 billion in the second.  The pickup was
largely attributable to a shift to an increase in net intercompany debt investment
abroad from a decrease.  In addition, net equity capital investment abroad
picked up.  In contrast, reinvested earnings decreased.

        U.S. official reserve assets decreased $1.0 billion in the third
quarter, following an increase of $0.6 billion in the second.

Foreign-owned assets in the United States

        Foreign-owned assets in the United States increased $400.2 billion in
the third quarter, following an increase of $364.6 billion in the second.

        U.S. liabilities to foreigners reported by U.S. banks increased $89.1
billion in the third quarter, following an increase of $79.6 billion in the
second.

        Transactions in U.S. Treasury securities shifted to net sales by
foreigners of $7.2 billion in the third quarter from net purchases by
foreigners of $9.8 billion in the second.

        Net purchases by foreigners of U.S. securities other than U.S. Treasury
securities were $138.8 billion in the third quarter, up from $127.3 billion in
the second.  Transactions in U.S. stocks shifted to net purchases by foreigners
of $22.4 billion from net sales by foreigners of $1.4 billion.  Net purchases
by foreigners of U.S. corporate bonds were $90.7 billion, down from $100.6
billion.  Net purchases by foreigners of federally sponsored agency bonds were
$25.7 billion, down from $28.0 billion.

        Foreign direct investment in the United States increased $44.1 billion
in the third quarter, following an increase of $45.8 billion in the second.
The small slowdown was largely attributable to a slowdown in net intercompany
debt investment in the United States.  Net equity capital investment in the
United States also eased, and reinvested earnings decreased slightly.

        Foreign official assets in the United States increased $80.8 billion in
the third quarter, following an increase of $75.9 billion in the second.

        Net U.S. currency shipments to foreigners were virtually unchanged at
$1.1 billion in the third quarter.

        The statistical discrepancy--errors and omissions in recorded
transactions--was a positive $49.7 billion in the third quarter, compared with
a positive $64.9 billion in the second.

        In the third quarter, the U.S. dollar depreciated 1 percent on a trade-
weighted quarterly average basis against a group of 7 major currencies.

                                   Revisions

        The second-quarter international transactions are revised from
previously published estimates.  The current-account deficit was revised to
$217.1 billion from $218.4 billion.  The goods deficit was unrevised at $210.6
billion; the services surplus was revised to $17.5 billion from $16.8 billion;
the deficit on income was revised to $2.2 billion from $4.1 billion; and net
unilateral current transfers to foreigners were revised to $21.9 billion from
$20.4 billion.  Net financial inflows were revised to $153.2 billion from
$154.1 billion.

                            *          *          *

        Release dates in 2007:

        Fourth quarter and year 2006.................March 14, 2007 (Wednesday)
        First quarter 2007...............................June 15, 2007 (Friday)
        Second quarter 2007.........................September 14, 2007 (Friday)
        Third quarter 2007...........................December 17, 2007 (Monday)

                            *          *          *

        Summary BEA 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

        BEA’s national, international, regional, and industry estimates; 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.

                                                                                                                                                               December 18, 2006
    Table 1. U.S. International Transactions
    [Millions of dollars, quarters seasonally adjusted]

                                                                                                           2005                                2006                       Change:
                                           (Credits +, debits -)                                2005                                                                       2006
                                                                                                           I        II       III      IV       I        II r     III p    II-III

                                              Current account

            1 Exports of goods and services and income receipts................................ 1,749,892  415,277  429,326  442,935  462,357  484,396  511,983  526,874   14,891

            2    Exports of goods and services................................................. 1,275,245  306,580  316,645  320,853  331,165  344,430  355,945  366,083   10,138

            3        Goods, balance of payments basis..........................................   894,631  214,189  222,591  224,947  232,904  244,512  252,843  262,069    9,226

            4        Services..................................................................   380,614   92,391   94,054   95,906   98,261   99,918  103,102  104,014      912
            5            Transfers under U.S. military agency sales contracts..................    19,038    4,679    4,675    5,239    4,446    4,453    4,226    4,067     -159

            6            Travel................................................................    81,680   19,983   20,934   20,389   20,374   20,742   21,443   21,464       21
            7            Passenger fares.......................................................    20,931    4,890    5,161    5,508    5,371    5,545    5,275    5,326       51
            8            Other transportation..................................................    42,245   10,103   10,353   10,545   11,244   11,588   12,202   12,216       14

            9            Royalties and license fees............................................    57,410   14,146   13,943   14,397   14,923   15,040   15,567   15,509      -58
           10            Other private services................................................   158,223   38,316   38,726   39,538   41,643   42,273   44,103   45,137    1,034
           11            U.S. Government miscellaneous services................................     1,087      274      262      291      260      277      286      295        9

           12    Income receipts...............................................................   474,647  108,697  112,681  122,081  131,192  139,966  156,038  160,791    4,753
           13        Income receipts on U.S.-owned assets abroad...............................   471,722  107,988  111,952  121,350  130,437  139,238  155,312  160,053    4,741
           14            Direct investment receipts............................................   251,370   58,846   60,572   64,476   67,481   68,738   74,923   75,912      989
           15            Other private receipts................................................   217,637   48,437   50,674   56,247   62,279   69,923   79,759   83,515    3,756
           16            U.S. Government receipts..............................................     2,715      705      706      627      677      577      630      626       -4
           17        Compensation of employees.................................................     2,925      709      729      731      755      728      726      738       12

           18 Imports of goods and services and income payments................................-2,455,328 -579,764 -599,390 -616,886 -659,290 -678,052 -707,254 -730,974  -23,720

           19    Imports of goods and services.................................................-1,991,975 -474,688 -488,703 -502,645 -525,939 -535,570 -549,059 -566,401  -17,342

           20        Goods, balance of payments basis..........................................-1,677,371 -397,457 -410,811 -423,693 -445,410 -452,481 -463,441 -480,681  -17,240

           21        Services..................................................................  -314,604  -77,231  -77,892  -78,952  -80,529  -83,089  -85,618  -85,720     -102
           22            Direct defense expenditures...........................................   -30,062   -7,542   -7,478   -7,539   -7,503   -7,692   -7,740   -7,865     -125

           23            Travel................................................................   -69,175  -17,270  -17,589  -17,181  -17,135  -17,634  -18,639  -18,136      503
           24            Passenger fares.......................................................   -26,066   -6,213   -6,555   -6,654   -6,644   -6,749   -6,948   -6,595      353
           25            Other transportation..................................................   -62,107  -15,617  -15,135  -15,205  -16,150  -16,232  -16,377  -16,603     -226

           26            Royalties and license fees............................................   -24,501   -5,880   -6,004   -6,356   -6,261   -6,741   -6,513   -6,383      130
           27            Other private services................................................   -98,714  -23,699  -24,169  -25,001  -25,845  -27,045  -28,385  -29,119     -734
           28            U.S. Government miscellaneous services................................    -3,979   -1,010     -962   -1,016     -991     -996   -1,016   -1,019       -3

           29    Income payments...............................................................  -463,353 -105,076 -110,687 -114,240 -133,351 -142,482 -158,195 -164,573   -6,378
           30        Income payments on foreign-owned assets in the United States..............  -454,124 -102,817 -108,403 -111,887 -131,018 -140,132 -155,846 -162,217   -6,371
           31            Direct investment payments............................................  -116,953  -28,490  -29,520  -24,105  -34,839  -34,443  -36,866  -40,106   -3,240
           32            Other private payments................................................  -223,612  -48,786  -51,490  -58,479  -64,857  -72,813  -82,539  -84,801   -2,262
           33            U.S. Government payments..............................................  -113,559  -25,541  -27,393  -29,303  -31,322  -32,876  -36,441  -37,310     -869
           34        Compensation of employees.................................................    -9,229   -2,259   -2,284   -2,353   -2,333   -2,350   -2,349   -2,356       -7

           35 Unilateral current transfers, net................................................   -86,072  -27,237  -23,194   -9,464  -26,176  -19,542  -21,856  -21,450      406
           36    U.S. Government grants........................................................   -31,362   -9,221   -5,780   -7,270   -9,091   -4,631   -5,341   -5,529     -188
           37    U.S. Government pensions and other transfers..................................    -6,303   -1,558   -1,569   -1,584   -1,592   -1,742   -1,755   -1,710       45
           38    Private remittances and other transfers.......................................   -48,407  -16,458  -15,845     -610  -15,493  -13,169  -14,760  -14,211      549


                                                                                                                                                                December 18, 2006
    Table 1. U.S. International Transactions (Continued)
    [Millions of dollars, quarters seasonally adjusted]

                                                                                                           2005                                2006                       Change:
                                           (Credits +, debits -)                                2005                                                                       2006
                                                                                                           I        II       III      IV       I        II r     III p    II-III

                                       Capital and financial account

                                              Capital account

           39 Capital account transactions, net................................................    -4,351   -2,691     -589     -557     -514   -1,756   -1,003     -551      452

                                             Financial account

           40 U.S.-owned assets abroad, net (increase/financial outflow (-))...................  -426,801  -87,391 -196,376 -132,380  -10,656 -355,978 -211,375 -223,769  -12,394

           41    U.S. official reserve assets, net.............................................    14,096    5,331     -797    4,766    4,796      513     -560    1,006    1,566
           42        Gold......................................................................      ....     ....     ....     ....     ....     ....     ....     ....     ....
           43        Special drawing rights....................................................     4,511    1,713      -97    2,976      -81      -67      -51      -54       -3
           44        Reserve position in the International Monetary Fund.......................    10,200    3,763     -564    1,951    5,050      729     -351    1,275    1,626
           45        Foreign currencies........................................................      -615     -145     -136     -161     -173     -149     -158     -215      -57

           46    U.S. Government assets, other than official reserve assets, net...............     5,539    2,591      989    1,501      459    1,049    1,765      287   -1,478
           47        U.S. credits and other long-term assets...................................    -2,255     -519     -708     -518     -509   -1,517     -376     -575     -199
           48        Repayments on U.S. credits and other long-term assets.....................     5,603    1,083    1,586    1,957      977    2,558    2,147      871   -1,276
           49        U.S. foreign currency holdings and U.S. short-term assets, net............     2,191    2,027      111       62       -9        8       -6       -9       -3

           50    U.S. private assets, net......................................................  -446,436  -95,313 -196,568 -138,647  -15,911 -357,540 -212,580 -225,062  -12,482
           51        Direct investment.........................................................    -9,072  -31,259  -33,957   30,342   25,799  -61,251  -46,769  -63,063  -16,294
           52        Foreign securities........................................................  -180,125  -50,367  -45,702  -36,790  -47,266  -53,692  -53,915  -53,034      881
           53        U.S. claims on unaffiliated foreigners reported by
                         U.S. nonbanking concerns..............................................   -44,221  -67,170   57,244  -29,483   -4,812  -46,190  -31,199  -23,302    7,897
           54        U.S. claims reported by U.S. banks, not included elsewhere................  -213,018   53,483 -174,153 -102,716   10,368 -196,407  -80,697  -85,663   -4,966

           55 Foreign-owned assets in the United States, net (increase/financial inflow (+))... 1,212,250  224,128  346,179  388,592  253,350  527,498  364,576  400,161   35,585

           56    Foreign official assets in the United States, net.............................   199,495   18,965   74,613   33,983   71,934   75,697   75,869   80,775    4,906
           57        U.S. Government securities................................................   156,450   33,007   36,313   25,926   61,204   66,219   21,553   80,137   58,584
           58            U.S. Treasury securities..............................................    71,749    9,226   16,892    8,213   37,418   42,156   -8,905   47,225   56,130
           59            Other.................................................................    84,701   23,781   19,421   17,713   23,786   24,063   30,458   32,912    2,454
           60        Other U.S. Government liabilities.........................................      -488     -740      112      395     -255       37      724    1,073      349
           61        U.S. liabilities reported by U.S. banks, not included elsewhere...........    24,275  -15,814   34,187      824    5,078     -821   42,241   -7,207  -49,448
           62        Other foreign official assets.............................................    19,258    2,512    4,001    6,838    5,907   10,262   11,351    6,772   -4,579

           63    Other foreign assets in the United States, net................................ 1,012,755  205,163  271,566  354,609  181,416  451,801  288,707  319,386   30,679
           64        Direct investment.........................................................   109,754   30,539    8,245   44,459   26,510   45,268   45,843   44,090   -1,753
           65        U.S. Treasury securities..................................................   199,491   86,108   14,103   37,239   62,041   -5,212    9,784   -7,202  -16,986
           66        U.S. securities other than U.S. Treasury securities.......................   474,140   77,412  111,808  153,049  131,871  186,009  127,285  138,757   11,472
           67        U.S. currency.............................................................    19,416    1,072    4,507    4,679    9,158    1,932    1,127    1,129        2
           68        U.S. liabilities to unaffiliated foreigners reported by
                         U.S. nonbanking concerns..............................................    30,105   80,174  -20,035   20,271  -50,305   74,953   25,082   53,496   28,414
           69        U.S. liabilities reported by U.S. banks, not included elsewhere...........   179,849  -70,142  152,938   94,912    2,141  148,851   79,586   89,116    9,530

           70 Statistical discrepancy (sum of above items with sign reversed)..................    10,410   57,678   44,044  -72,240  -19,071   43,434   64,929   49,709  -15,220

              Memoranda:
           71 Balance on goods (lines 3 and 20)................................................  -782,740 -183,268 -188,220 -198,746 -212,506 -207,969 -210,598 -218,612   -8,014
           72 Balance on services (lines 4 and 21).............................................    66,011   15,160   16,162   16,954   17,733   16,829   17,484   18,294      810
           73 Balance on goods and services (lines 2 and 19)...................................  -716,730 -168,108 -172,058 -181,792 -194,774 -191,140 -193,114 -200,318   -7,204
           74 Balance on income (lines 12 and 29)..............................................    11,293    3,621    1,994    7,841   -2,159   -2,516   -2,157   -3,782   -1,625
           75 Unilateral current transfers, net (line 35)......................................   -86,072  -27,237  -23,194   -9,464  -26,176  -19,542  -21,856  -21,450      406
           76 Balance on current account (lines 1, 18, and 35 or lines 73, 74, and 75).........  -791,508 -191,724 -193,258 -183,415 -223,109 -213,198 -217,127 -225,550   -8,423
    r Revised
    p Preliminary
    NOTE:  Details may not add to totals because of rounding.    Source: U.S. Bureau of Economic Analysis