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EMBARGOED UNTIL RELEASE AT 8:30 a.m. EDT, Thursday, March 21, 2024

BEA 24—08

U.S. International Transactions, 4th Quarter and Year 2023

Current-Account Deficit Narrowed by 0.8 Percent in Fourth Quarter

Current-Account Balance, Fourth Quarter (chart 1)

The U.S. current-account deficit, which reflects the combined balances on trade in goods and services and income flows between U.S. residents and residents of other countries, narrowed by $1.6 billion, or 0.8 percent, to $194.8 billion in the fourth quarter of 2023, according to statistics released today by the U.S. Bureau of Economic Analysis (BEA). The revised third-quarter deficit was $196.4 billion.

The fourth-quarter deficit was 2.8 percent of current-dollar gross domestic product (GDP), down less than 0.1 percent from the third quarter.

The $1.6 billion narrowing of the current-account deficit in the fourth quarter primarily reflected a reduced deficit on secondary income that was mostly offset by an expanded deficit on goods.

Quarterly U.S. Current-Account and Component Balances

Current-Account Transactions (tables 1–5 and chart 2)

Exports of goods and services to, and income received from, foreign residents increased $1.9 billion to $1.18 trillion in the fourth quarter. Imports of goods and services from, and income paid to, foreign residents increased $0.3 billion to $1.37 trillion.¹

Quarterly U.S. Current-Account Transactions

Trade in goods (table 2)

Exports of goods decreased $1.4 billion to $514.4 billion, reflecting decreases in automotive vehicles, parts, and engines, led by trucks, buses, and special purpose vehicles; in consumer goods, led by medicinal, dental, and pharmaceutical products; and in nonmonetary gold. The decrease in exports of goods was partly offset by an increase in industrial supplies and materials, mostly petroleum and products. Imports of goods increased $4.4 billion to $779.4 billion, reflecting increases in capital goods, mainly computers and computer accessories, peripherals, and parts, and in industrial supplies and materials, mainly petroleum and products. The increase in imports was partly offset by a decrease in consumer goods, mostly toys and sporting goods.

Trade in services (table 3)

Exports of services increased $2.0 billion to $254.4 billion, reflecting increases in travel, mostly other personal travel, and in transport, mainly air passenger transport. Imports of services increased $2.5 billion to $181.5 billion, reflecting an increase in travel, mostly other personal travel.

Primary income (table 4)

Receipts of primary income decreased $3.7 billion to $361.6 billion, and payments of primary income decreased $2.9 billion to $325.5 billion. The decreases in both receipts and payments reflected a decrease in direct investment income, primarily earnings, that was partly offset by an increase in other investment income, primarily interest on loans and deposits.

Secondary income (table 5)

Receipts of secondary income increased $5.0 billion to $49.6 billion, reflecting an increase in general government transfers, mostly fines and penalties. Payments of secondary income decreased $3.6 billion to $88.5 billion, reflecting a decrease in general government transfers, mainly international cooperation.

Capital-Account Transactions (table 1)

Capital-transfer receipts decreased $3 million to $15 million. Capital-transfer payments increased $0.3 billion to $2.5 billion, reflecting an increase in infrastructure grants.

Financial-Account Transactions (tables 1, 6, 7, and 8 and chart 3)

Net financial-account transactions were −$221.1 billion in the fourth quarter, reflecting net U.S. borrowing from foreign residents.

Quarterly U.S. Financial-Account Transactions Excluding Financial Derivatives

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

Fourth-quarter transactions increased U.S. residents’ foreign financial assets by $259.0 billion. Transactions increased direct investment assets, mostly equity, by $149.8 billion and other investment assets, mostly loans and deposits, by $147.6 billion. Transactions decreased portfolio investment assets, mostly equity, by $37.0 billion and reserve assets by $1.4 billion.

Liabilities (tables 1, 6, 7, and 8)

Fourth-quarter transactions increased U.S. liabilities to foreign residents by $469.8 billion. Transactions increased portfolio investment liabilities, mostly long-term debt securities, by $242.6 billion; other investment liabilities, primarily deposits, by $138.9 billion; and direct investment liabilities, mostly equity, by $88.4 billion.

Financial derivatives (table 1)

Net transactions in financial derivatives were –$10.2 billion in the fourth quarter, reflecting net U.S. borrowing from foreign residents.

	Preliminary estimates	Revised estimates
Table A. Updates to Third-Quarter 2023 International Transactions Accounts Balances [Billions of dollars, seasonally adjusted]
Current-account balance	–200.3	−196.4
Goods balance	−261.0	−259.2
Services balance	76.2	73.3
Primary income balance	30.0	36.9
Secondary income balance	−45.6	−47.5
Net financial-account transactions	−138.6	−207.0
U.S. Bureau of Economic Analysis

In addition to revisions to source data for the third quarter of 2023, seasonally adjusted statistics for the first, second, and third quarters of 2023 were revised to force the sum of seasonally adjusted quarters to equal the annual totals. This forcing procedure was also applied to the fourth quarter of 2023.

Current-Account Balance, Year 2023

The U.S. current-account deficit narrowed by $152.8 billion, or 15.7 percent, to $818.8 billion in 2023. The deficit was 3.0 percent of current-dollar GDP, down from 3.8 percent in 2022. The $152.8 billion narrowing of the current-account deficit in 2023 mostly reflected a reduced deficit on goods.

Current-Account Transactions (tables 1–5)

Exports of goods and services to, and income received from, foreign residents increased $228.0 billion to $4.65 trillion in 2023. Imports of goods and services from, and income paid to, foreign residents increased $75.2 billion to $5.47 trillion.

Trade in goods (table 2)

Exports of goods decreased $37.2 billion to $2.05 trillion, and imports of goods decreased $160.6 billion to $3.11 trillion. The decreases in both exports and imports primarily reflected a decrease in industrial supplies and materials, led by petroleum and products.

Trade in services (table 3)

Exports of services increased $70.6 billion to $999.1 billion, reflecting an increase in travel, mostly other personal travel. Imports of services increased $22.6 billion to $719.3 billion, reflecting an increase in travel, mostly other personal travel, that was partly offset by a decrease in transport, mainly sea freight transport.

Primary income (table 4)

Receipts of primary income increased $198.1 billion to $1.42 trillion, and payments of primary income increased $210.0 billion to $1.28 trillion. The increases in both receipts and payments primarily reflected an increase in other investment income, mainly interest on loans and deposits.

Secondary income (table 5)

Receipts of secondary income decreased $3.4 billion to $184.9 billion, reflecting a decrease in general government transfers, mainly fines and penalties. Payments of secondary income increased $3.3 billion to $360.6 billion, reflecting an increase in private transfers, mainly personal transfers and insurance-related transfers.

Capital-Account Transactions (table 1)

Capital-transfer receipts decreased $8.3 billion to $85 million in 2023. Transactions in 2022 reflected receipts from foreign insurance companies for losses resulting from Hurricane Ian. Capital-transfer payments in 2023 increased $0.3 billion to $13.3 billion, reflecting an increase in infrastructure grants.

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

Net financial-account transactions were −$906.3 billion in 2023, reflecting net U.S. borrowing from foreign residents.

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

Transactions in 2023 increased U.S. residents’ foreign financial assets by $966.6 billion. Transactions increased direct investment assets, mostly equity, by $494.3 billion; other investment assets, mostly loans, by $415.8 billion; portfolio investment assets, mainly long-term debt securities, by $56.5 billion; and reserve assets by $41 million.²

Liabilities (tables 1, 6, 7, and 8)

Transactions in 2023 increased U.S. liabilities to foreign residents by $1.86 trillion. Transactions increased portfolio investment liabilities, mostly long-term debt securities, by $1.21 trillion; direct investment liabilities, mostly equity, by $394.1 billion; and other investment liabilities, mostly deposits, by $250.5 billion.

Financial derivatives (table 1)

Net transactions in financial derivatives were –$15.6 billion in 2023, reflecting net U.S. borrowing from foreign residents.

Upcoming Update to the U.S. International Transactions Accounts

The annual update of the International Transactions Accounts will be released along with preliminary estimates for the first quarter of 2024 on June 20, 2024. A preview of the annual update will be available in the Survey of Current Business in April 2024.

Upcoming Release of New International Investment Position Statistics

With the release of the International Investment Position (IIP) Accounts on June 26, 2024, BEA will (1) expand “Table 1.3. Change in the Yearend U.S. Net International Investment Position,” which currently presents annual statistics, to include new quarterly statistics on price changes and exchange-rate changes for U.S. assets and liabilities beginning with the first quarter of 2023 and (2) rename this table “Table 1.3. Change in the U.S. Net International Investment Position.” To prepare users for this change, a prototype of the new IIP table 1.3 is available in BEA’s Interactive Data Application and Data Application Programming Interface; it will be updated on March 27, 2024, with the release of the IIP Accounts for the fourth quarter and year 2023. On June 26, 2024, the expanded table will be incorporated into the standard presentation of the IIP Accounts in the Interactive Data Application and the Data Application Programming Interface. More information will be available in the March 27 IIP news release and in the annual update preview article in the Survey in April 2024.

Next release: June 20, 2024, at 8:30 a.m. EDT
U.S. International Transactions, 1st Quarter 2024 and Annual Update

¹ U.S. international transactions are presented in current dollars in accordance with international statistical presentation guidelines. For a comparison of current-dollar, or nominal, and inflation-adjusted, or real, measures of international transactions, see “SECTION 4 – FOREIGN TRANSACTIONS” of the National Income and Product Accounts.

² Statistics for portfolio investment assets and liabilities beginning with the first quarter of 2023 include newly available source data from the Treasury International Capital System “Aggregate Holdings, Purchases and Sales, and Fair Value Changes of Long-Term Securities by U.S. and Foreign Residents” form, which BEA incorporated with the “U.S. International Transactions, 2nd Quarter 2023” news release. For more information, see the “Technical Note” that accompanied the release.

Full Release (PDF)

Tables Only (Excel)

Release Highlights (PDF)

Release Highlights (Annual) (PDF)

Historical Comparisons (PDF)

Historical Comparisons (Annual) (PDF)

Quarterly Current-Account Balances (PDF)

Annual Current-Account Balances (PDF)

Technical

Elliot Berg

301-278-9597

Elliot.Berg@bea.gov

Media

Connie O’Connell

301-278-9003

Connie.OConnell@bea.gov

Additional Information

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Historical time series for these estimates can be accessed in BEA's Interactive Data Application.
Access BEA data by registering for BEA's Data Application Programming Interface.
For more on BEA statistics, see our online journal, the Survey of Current Business.
For upcoming economic indicators, see BEA's news release schedule.
More information on the International Transactions Accounts (ITAs) and a description of the estimation methods used to compile them is provided in U.S. International Economic Accounts: Concepts and Methods.

Definitions

The current account consists of transactions between U.S. residents and nonresidents in goods, services, primary income, and secondary income.

Goods are physical items with ownership rights that can be exchanged among institutional units through transactions.

Services transactions consist of transactions arising from productive activities that change the condition of the consumer or that facilitate the exchange of products and financial assets.

Primary income transactions include investment income and compensation of employees. Investment income is the return on holdings of financial assets and includes direct investment income, portfolio investment income, other investment income, and income on reserve assets. Compensation of employees is income for the contribution of labor inputs to the production process.

Secondary income consists of current transfers between residents and nonresidents. Unlike an exchange, a transfer is a transaction in which a good, service, or asset is provided without a corresponding return of economic value. Secondary income receipts and payments include U.S. government and private transfers, such as international cooperation (primarily U.S. government grants), U.S. government pensions, fines and penalties, withholding taxes, personal transfers (remittances), insurance-related transfers, and other current transfers.

The capital account consists of capital transfers between residents and nonresidents and the cross-border acquisition and disposal of nonproduced nonfinancial assets. Capital transfers include debt forgiveness, investment grants, and certain disaster-related nonlife insurance claims. Nonproduced nonfinancial assets include the acquisition and disposal of natural resources, outright sales and purchases of franchises and trademarks, and fees paid by one sporting franchise to another for the transfer of a player. Capital-account transactions are distinguished from current-account transactions in that capital-account transactions result in a change in the assets of one or both parties to the transaction without affecting the income or savings of either party.

The financial account consists of transactions between U.S. residents and nonresidents for direct investment, portfolio investment, other investment, reserves, and financial derivatives other than reserves.

Direct investment is a category of cross-border investment associated with a resident in one economy having control or a significant degree of influence over the management of an enterprise resident in another economy. Ownership or control of 10 percent or more of the voting securities of an entity is the threshold for separating direct investment from other types of investment. Direct investment transactions include transactions in equity (including reinvestment of earnings) and debt instruments.

Portfolio investment transactions consist of cross-border transactions involving equity and investment fund shares and debt securities, excluding those included in direct investment or reserve assets.

Other investment is a residual category that includes cross-border financial instruments other than those included in direct investment, portfolio investment, financial derivatives, and reserve assets. Other investment transactions consist of transactions in other equity (equity not in the form of securities), currency and deposits, loans, insurance technical reserves, trade credit and advances, and, for liabilities, special drawing rights allocations.

Reserve assets are those external assets that are readily available to and controlled by monetary authorities for meeting balance-of-payments financing needs, for intervention in exchange markets to affect the currency exchange rate, and for other related purposes, such as maintaining confidence in the currency and the economy and serving as a basis for foreign borrowing. The major published categories are monetary gold, International Monetary Fund (IMF) special drawing rights, reserve position in the IMF, and other reserve assets.

Financial derivatives other than reserves consist of financial contracts that are linked to underlying financial instruments, commodities, or indicators. Transactions in financial derivatives consist of U.S. cash receipts and payments arising from the sale, purchase, periodic settlement, or final settlement of financial derivatives contracts. Transactions in financial derivatives are only available as a net value equal to transactions for assets less transactions for liabilities. A positive value represents net cash payments by U.S. residents to foreign residents from settlements of derivatives contracts (net lending), and a negative value represents net U.S. cash receipts (net borrowing).

The statistical discrepancy is the difference between net acquisition of assets and net incurrence of liabilities in the financial account (including financial derivatives) less the difference between total credits and total debits recorded in the current and capital accounts. The statistical discrepancy can also be calculated as the difference between net lending (borrowing) measured from financial-account transactions and net lending (borrowing) measured from current- and capital-account transactions.

The current-account balance is the difference between credits (exports and income receipts) and debits (imports and income payments) in the current account. The balance is a net measure of current-account transactions between the United States and the rest of the world. A positive balance indicates a current-account surplus. A negative balance indicates a current-account deficit.

Net lending (borrowing) measures the balance of funds supplied to the rest of the world. Net lending means that, in net terms, the U.S. economy supplies funds to the rest of the world. Net borrowing means the opposite. Net lending (borrowing) can be measured by current- and capital-account transactions or by financial-account transactions.

Conceptually, the two measures are equal. In practice, the two measures differ by the statistical discrepancy.

Release and update cycle

Preliminary quarterly statistics for the ITAs are released in March, June, September, and December, approximately 80 days after the end of the reference quarter. These statistics are updated the following quarter to incorporate new source data. Additionally, in March, seasonally adjusted statistics for the first, second, and third quarters of the previous year are revised to force the sum of seasonally adjusted quarters to equal the annual totals; this forcing procedure is also applied to the preliminary fourth quarter. Quarterly statistics are open for revision for at least the prior 3 years in annual updates released in June. Preliminary annual statistics are released in March, along with statistics for the fourth quarter of the previous year. These annual statistics are open for revision for at least the prior 3 years in subsequent annual updates.

Related statistics

The ITAs constitute one part of a broader set of U.S. International Economic Accounts that, taken together, provide a comprehensive, integrated, and detailed picture of U.S. international economic activities.

The International Investment Position (IIP) Accounts are released quarterly. Financial transactions reported in the ITAs are one type of change in position recorded in the IIP Accounts.

Statistics on direct investment and multinational enterprises (MNEs) include annual statistics on the activities of U.S. MNEs and U.S. affiliates of foreign MNEs, detailed annual and quarterly statistics on direct investment, and annual statistics on new foreign direct investment in the United States.

Statistics on international services, released annually, include detailed annual information on trade in services and on services supplied through the channel of direct investment by affiliates of MNEs.

U.S. international trade in goods and services, released by BEA and the U.S. Census Bureau, provides monthly statistics on trade in goods and services.