FOR WIRE TRANSMISSION: 8:30 A.M. EDT, WEDNESDAY, September 16, 2009 Douglas B. Weinberg: (202) 606-9590 BEA 09-40 U.S. International Transactions: Second Quarter 2009 Current Account The U.S. current-account deficit—the combined balances on trade in goods and services, income, and net unilateral current transfers—decreased to $98.8 billion (preliminary) in the second quarter of 2009, the smallest deficit since the fourth quarter of 2001, from $104.5 billion (revised) in the first quarter. The decrease was more than accounted for by a decrease in the deficit on goods. A small increase in the surplus on services also contributed to the lower current-account deficit. An increase in net unilateral current transfers to foreigners and a decrease in the surplus on income were partly offsetting. Goods and services The deficit on goods and services decreased to $83.0 billion in the second quarter from $92.4 billion in the first. Goods The deficit on goods decreased to $115.5 billion in the second quarter from $124.0 billion in the first. Goods exports decreased to $246.1 billion from $249.4 billion. The decrease was more than accounted for by a decrease in capital goods, reflecting declines in most categories of capital goods. Automotive products and consumer goods also decreased. These decreases were partly offset by increases in foods, feeds, and beverages and in industrial supplies and materials. Goods imports decreased to $361.6 billion from $373.4 billion. The decrease was more than accounted for by a decrease in nonpetroleum products, particularly in nonpetroleum industrial supplies and materials and in capital goods. Consumer goods and automotive products also decreased. These decreases were partly offset by an increase in petroleum and products. Services The surplus on services increased to $32.5 billion in the second quarter from $31.6 billion in the first. Services exports decreased to $121.7 billion from $122.8 billion. The decrease was more than accounted for by decreases in travel, in passenger fares, and in “other” transportation (such as freight and port services). These decreases were partly offset by increases in transfers under U.S. military agency sales contracts and in “other” private services (such as business, professional, and technical services, insurance services, and financial services). Services imports decreased to $89.2 billion from $91.2 billion. The decrease was more than accounted for by decreases in “other” transportation, in travel, and in passenger fares. These decreases were partly offset by increases in “other” private services and in direct defense expenditures. Income The surplus on income decreased to $16.4 billion in the second quarter from $18.3 billion in the first. Investment income Income receipts on U.S.-owned assets abroad decreased to $132.3 billion from $134.6 billion. Decreases in “other” private receipts (which consists of interest and dividends) and in U.S. government receipts were mostly offset by an increase in direct investment receipts. Income payments on foreign-owned assets in the United States decreased to $114.1 billion from $114.5 billion. Decreases in “other” private payments (which consists of interest and dividends) and in U.S. government payments were mostly offset by an increase in direct investment payments. 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 edged down to $2.5 billion from $2.6 billion. Unilateral current transfers Net unilateral current transfers to foreigners were $32.2 billion in the second quarter, up from $30.3 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 (outflows) were virtually unchanged at $0.7 billion in the second quarter. Financial Account Net financial inflows were $58.3 billion in the second quarter, up from $35.4 billion in the first. The pickup resulted from a shift from financial outflows to financial inflows for foreign-owned assets in the United States that was only partly offset by a slowdown in financial inflows for U.S.-owned assets abroad. U.S.-owned assets abroad U.S.-owned assets abroad decreased $41.9 billion in the second quarter, following a decrease of $94.7 billion in the first. U.S. claims on foreigners reported by U.S. banks and securities brokers increased $34.4 billion in the second quarter, following an increase of $89.4 billion in the first. (Examples of these claims are U.S. residents’ deposits at banks abroad and loans by U.S. banks and securities brokers to foreigners.) Net U.S. purchases of foreign securities were $92.4 billion in the second quarter, up from $36.2 billion in the first. Net U.S. purchases of foreign stocks were $37.2 billion, up from $1.8 billion. Net U.S. purchases of foreign bonds were $55.2 billion, up from $34.4 billion. U.S. direct investment abroad increased $44.9 billion in the second quarter, following an increase of $40.3 billion in the first. A pickup in reinvested earnings was partly offset by a shift from an increase to a decrease in net equity capital investment abroad and a larger decrease in net intercompany debt investment abroad. U.S. official reserve assets increased $3.6 billion in the second quarter, following an increase of $1.0 billion in the first. U.S. government assets other than official reserve assets decreased $193.9 billion in the second quarter, following a decrease of $244.1 billion in the first. The decreases in both quarters resulted from the reversal of some of the swaps initiated under temporary reciprocal currency arrangements between the U.S. Federal Reserve System and foreign central banks. Foreign-owned assets in the United States Foreign-owned assets in the United States increased $16.4 billion in the second quarter, following a decrease of $67.8 billion in the first. U.S. liabilities to foreigners reported by U.S. banks and securities brokers decreased $144.4 billion in the second quarter, following a decrease of $163.8 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 and securities brokers in the United States.) Transactions in U.S. Treasury securities by private foreigners shifted to net foreign sales of $22.7 billion in the second quarter from net foreign purchases of $53.7 billion in the first. Transactions in U.S. securities other than U.S. Treasury securities by private foreigners shifted to net foreign purchases of $14.2 billion in the second quarter from net foreign sales of $56.0 billion in the first. Transactions in U.S. federally sponsored agency bonds shifted to net foreign purchases of $0.4 billion from net foreign sales of $49.7 billion. Net foreign purchases of U.S. stocks were $35.8 billion, up from $6.1 billion. Net foreign sales of U.S. corporate bonds were $22.0 billion, up from $12.4 billion. Foreign direct investment in the United States increased $26.1 billion in the second quarter, following an increase of $23.9 billion in the first. A shift from negative to positive reinvested earnings was mostly offset by slowdowns in net intercompany debt investment and net equity capital investment in the United States. Foreign official assets in the United States increased $125.0 billion in the second quarter, following an increase of $70.9 billion in the first. Transactions in U.S. currency shifted to net shipments to the United States of $1.9 billion in the second quarter from net shipments to foreign countries of $11.8 billion in the first. The statistical discrepancy—errors and omissions in recorded transactions—was $41.2 billion in the second quarter, compared with $69.8 billion in the first. In the second quarter, the U.S. dollar depreciated 4 percent on a trade- weighted quarterly average basis against a group of 7 major currencies. Revisions The first-quarter international transactions are revised from previously published statistics. The current-account deficit was revised to $104.5 billion from $101.5 billion. The goods deficit was unrevised at $124.0 billion; the services surplus was revised to $31.6 billion from $32.8 billion; the income surplus was revised to $18.3 billion from $19.3 billion; and unilateral current transfers were revised to net outflows of $30.3 billion from $29.6 billion. Net financial inflows were revised to $35.4 billion from $47.1 billion. * * * Release dates in 2009: Fourth quarter and year 2008...................March 18, 2009 (Wednesday) First quarter 2009..............................June 17, 2009 (Wednesday) Second quarter 2009........................September 16, 2009 (Wednesday) Third quarter 2009..........................December 16, 2009 (Wednesday) * * * Summary BEA statistics 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 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. September 16, 2009 Table 1. U.S. International Transactions [Millions of dollars, quarters seasonally adjusted] 2008 2009 Change: (Credits +, debits -) 2008 2009:I - I II III IV I r II p 2009:II Current account 1 Exports of goods and services and income receipts................................... 2,591,233 654,217 671,886 673,383 591,747 507,553 500,835 -6,718 2 Exports of goods and services................................................... 1,826,596 451,290 473,090 478,064 424,151 372,201 367,816 -4,385 3 Goods, balance of payments basis............................................ 1,276,994 315,637 332,876 337,912 290,569 249,374 246,134 -3,240 4 Services.................................................................... 549,602 135,653 140,214 140,152 133,583 122,827 121,682 -1,145 5 Transfers under U.S. military agency sales contracts.................... 22,571 6,226 5,931 5,120 5,295 5,437 5,846 409 6 Travel.................................................................. 110,090 27,072 28,005 28,835 26,178 23,491 22,476 -1,015 7 Passenger fares......................................................... 31,623 7,522 7,950 8,254 7,896 7,146 6,507 -639 8 Other transportation.................................................... 58,945 14,541 15,601 15,621 13,182 10,779 10,652 -127 9 Royalties and license fees.............................................. 91,599 22,633 23,212 23,069 22,685 19,997 19,991 -6 10 Other private services.................................................. 233,529 57,359 59,209 58,940 58,021 55,665 55,891 226 11 U.S. government miscellaneous services.................................. 1,245 299 307 313 326 312 319 7 12 Income receipts................................................................. 764,637 202,927 198,796 195,319 167,596 135,352 133,019 -2,333 13 Income receipts on U.S.-owned assets abroad................................. 761,593 202,163 198,028 194,554 166,847 134,611 132,282 -2,329 14 Direct investment receipts.............................................. 370,747 98,426 100,538 96,047 75,736 63,168 69,829 6,661 15 Other private receipts.................................................. 385,940 103,024 96,756 97,196 88,964 68,995 61,360 -7,635 16 U.S. government receipts................................................ 4,906 713 735 1,311 2,147 2,448 1,093 -1,355 17 Compensation of employees................................................... 3,044 764 767 765 749 741 737 -4 18 Imports of goods and services and income payments................................... -3,168,938 -800,185 -828,458 -825,200 -715,096 -581,660 -567,401 14,259 19 Imports of goods and services................................................... -2,522,532 -633,943 -655,937 -664,006 -568,646 -464,609 -450,821 13,788 20 Goods, balance of payments basis............................................ -2,117,245 -534,482 -554,372 -559,002 -469,389 -373,411 -361,621 11,790 21 Services.................................................................... -405,287 -99,461 -101,565 -105,004 -99,257 -91,199 -89,200 1,999 22 Direct defense expenditures............................................. -36,452 -8,769 -8,986 -9,784 -8,913 -8,454 -8,629 -175 23 Travel.................................................................. -79,743 -20,235 -20,109 -19,848 -19,551 -18,504 -17,598 906 24 Passenger fares......................................................... -32,597 -7,868 -8,029 -8,343 -8,357 -6,979 -6,322 657 25 Other transportation.................................................... -72,143 -17,956 -18,496 -18,924 -16,767 -13,948 -12,722 1,226 26 Royalties and license fees.............................................. -26,616 -6,427 -6,537 -7,644 -6,007 -5,687 -5,689 -2 27 Other private services.................................................. -153,267 -37,122 -38,315 -39,331 -38,498 -36,521 -37,054 -533 28 U.S. government miscellaneous services.................................. -4,469 -1,083 -1,092 -1,130 -1,164 -1,105 -1,186 -81 29 Income payments................................................................. -646,406 -166,241 -172,521 -161,194 -146,450 -117,051 -116,581 470 30 Income payments on foreign-owned assets in the United States................ -636,043 -163,652 -169,951 -158,618 -143,823 -114,501 -114,085 416 31 Direct investment payments.............................................. -120,862 -27,269 -40,071 -29,050 -24,473 -11,970 -20,626 -8,656 32 Other private payments.................................................. -349,871 -94,416 -87,061 -88,504 -79,890 -66,038 -58,747 7,291 33 U.S. government payments................................................ -165,310 -41,967 -42,819 -41,064 -39,460 -36,493 -34,712 1,781 34 Compensation of employees................................................... -10,364 -2,590 -2,571 -2,576 -2,627 -2,550 -2,496 54 35 Unilateral current transfers, net................................................... -128,363 -33,330 -31,147 -32,361 -31,527 -30,343 -32,226 -1,883 36 U.S. government grants.......................................................... -36,003 -10,335 -7,893 -8,568 -9,207 -8,342 -10,488 -2,146 37 U.S. government pensions and other transfers.................................... -8,390 -2,082 -2,097 -2,100 -2,113 -2,300 -2,280 20 38 Private remittances and other transfers......................................... -83,970 -20,913 -21,157 -21,693 -20,207 -19,701 -19,458 243 September 16, 2009 Table 1. U.S. International Transactions (Continued) [Millions of dollars, quarters seasonally adjusted] 2008 2009 Change: (Credits +, debits -) 2008 2009:I - I II III IV I r II p 2009:II Capital account 39 Capital account transactions, net................................................... 953 -637 -682 2,967 -695 -710 -693 17 Financial account 40 U.S.-owned assets abroad, excluding financial derivatives (increase/financial outflow (-)).................................................... -106 -251,501 107,343 29,322 114,730 94,734 41,865 -52,869 41 U.S. official reserve assets.................................................... -4,848 -276 -1,267 -179 -3,126 -982 -3,632 -2,650 42 Gold........................................................................ 0 0 0 0 0 0 0 0 43 Special drawing rights...................................................... -106 -29 -22 -30 -25 -15 -8 7 44 Reserve position in the International Monetary Fund......................... -3,473 112 -955 256 -2,886 -754 -3,485 -2,731 45 Foreign currencies.......................................................... -1,269 -359 -290 -405 -215 -213 -139 74 46 U.S. government assets, other than official reserve assets...................... -529,615 3,268 -41,592 -225,997 -265,293 244,102 193,862 -50,240 47 U.S. credits and other long-term assets..................................... -2,202 -179 -1,106 -475 -442 -240 -1,949 -1,709 48 Repayments on U.S. credits and other long-term assets....................... 2,354 490 497 695 672 484 471 -13 49 U.S. foreign currency holdings and U.S. short-term assets................... -529,766 2,957 -40,983 -226,217 -265,523 243,858 195,340 -48,518 50 U.S. private assets............................................................. 534,357 -254,493 150,202 255,498 383,150 -148,387 -148,365 22 51 Direct investment........................................................... -332,012 -89,792 -103,619 -54,115 -84,486 -40,262 -44,861 -4,599 52 Foreign securities.......................................................... 60,761 -47,870 -40,566 79,182 70,015 -36,201 -92,406 -56,205 53 U.S. claims on unaffiliated foreigners reported by U.S. nonbanking concerns. 372,229 116,232 64,906 87,352 103,739 17,477 23,282 5,805 54 U.S. claims reported by U.S. banks and securities brokers................... 433,379 -233,063 229,481 143,079 293,882 -89,401 -34,380 55,021 55 Foreign-owned assets in the United States, excluding financial derivatives (increase/financial inflow (+))..................................................... 534,071 426,058 2,003 117,897 -11,888 -67,757 16,393 84,150 56 Foreign official assets in the United States.................................... 487,021 208,646 178,826 115,573 -16,024 70,892 124,989 54,097 57 U.S. government securities.................................................. 543,498 185,239 169,365 105,920 82,974 118,565 120,443 1,878 58 U.S. Treasury securities................................................ 477,652 106,005 76,220 116,479 178,948 118,309 123,495 5,186 59 Other................................................................... 65,846 79,234 93,145 -10,559 -95,974 256 -3,052 -3,308 60 Other U.S. government liabilities........................................... 8,626 1,645 2,439 1,642 2,900 2,720 1,905 -815 61 U.S. liabilities reported by U.S. banks and securities brokers.............. -153,443 -24,173 -29,697 9,797 -109,370 -51,891 -501 51,390 62 Other foreign official assets............................................... 88,340 45,935 36,719 -1,786 7,472 1,498 3,142 1,644 63 Other foreign assets in the United States....................................... 47,050 217,412 -176,823 2,324 4,136 -138,649 -108,596 30,053 64 Direct investment........................................................... 319,737 59,473 100,706 62,755 96,802 23,851 26,137 2,286 65 U.S. Treasury securities.................................................... 196,619 16,127 18,947 80,049 81,496 53,716 -22,740 -76,456 66 U.S. securities other than U.S. Treasury securities......................... -126,737 -15,179 19,983 -102,512 -29,029 -55,992 14,173 70,165 67 U.S. currency............................................................... 29,187 -6,750 230 5,845 29,862 11,816 -1,935 -13,751 68 U.S. liabilities to unaffiliated foreigners reported by U.S. nonbanking concerns..................................................... -45,167 73,211 -54,996 76,442 -139,824 -8,270 20,160 28,430 69 U.S. liabilities reported by U.S. banks and securities brokers.............. -326,589 90,530 -261,693 -120,255 -35,171 -163,770 -144,391 19,379 70 Financial derivatives, net.......................................................... -28,905 -7,966 -2,355 -4,075 -14,509 8,407 n.a. n.a. 71 Statistical discrepancy (sum of above items with sign reversed)..................... 200,055 13,344 81,410 38,067 67,236 69,777 41,227 /1/ -28,550 Memoranda: 72 Balance on goods (lines 3 and 20)................................................... -840,252 -218,846 -221,496 -221,090 -178,820 -124,036 -115,487 8,549 73 Balance on services (lines 4 and 21)................................................ 144,316 36,192 38,649 35,148 34,326 31,628 32,482 854 74 Balance on goods and services (lines 2 and 19)...................................... -695,936 -182,653 -182,847 -185,942 -144,495 -92,408 -83,004 9,404 75 Balance on income (lines 12 and 29)................................................. 118,231 36,686 26,274 34,125 21,146 18,301 16,438 -1,863 76 Unilateral current transfers, net (line 35)......................................... -128,363 -33,330 -31,147 -32,361 -31,527 -30,343 -32,226 -1,883 77 Balance on current account (lines 1, 18, and 35 or lines 74, 75, and 76)............ -706,068 -179,298 -187,719 -184,178 -154,875 -104,450 -98,792 5,658 /1/ The statistical discrepancy in this column cannot be calculated as the "sum of above items with sign reversed" because financial derivatives, net (line 70) are not available. p Preliminary r Revised n.a. Not available NOTE: Details may not add to totals because of rounding. Source: U. S. Bureau of Economic Analysis