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Christopher Bach: (202) 606-9545 BEA 05-10
U.S. International Transactions: Fourth Quarter and Year 2004
Fourth Quarter
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
$187.9 billion in the fourth quarter of 2004 (preliminary) from $165.9 billion
(revised) in the third quarter. The increase was largely accounted for by an
increase in the deficit on goods. In addition, net outflows for unilateral
current transfers increased and the surplus on income decreased. Partly
offsetting was an increase in the surplus on services.
Goods and services
The deficit on goods and services increased to $171.1 billion in the
fourth quarter from $155.9 billion in the third.
Goods
The deficit on goods increased to $183.5 billion in the fourth quarter
from $167.0 billion in the third quarter.
Goods exports increased to $208.6 billion from $205.0 billion. Much of
the increase was in industrial supplies and materials and in consumer goods.
Goods imports increased to $392.1 billion from $372.0 billion. Much of
the increase was in petroleum and petroleum products and in consumer goods.
Services
The surplus on services increased to $12.5 billion in the fourth
quarter from $11.2 billion in the third.
Services receipts increased to $87.3 billion from $85.1 billion. The
largest increases were in travel, in "other" transportation (such as freight
and port services), and in royalties and license fees.
Services payments increased to $74.8 billion from $73.9 billion.
Increases in "other" transportation and in "other" private services were partly
offset by a decrease in royalties and license fees.
Income
The surplus on income decreased to $2.1 billion in the fourth quarter
from $4.9 billion in the third.
Investment income
Income receipts on U.S.-owned assets abroad increased to $103.7 billion
from $92.0 billion. The increase was accounted for by increases in direct
investment receipts and in "other" private receipts (which consists of interest
and dividends).
Income payments on foreign-owned assets in the United States increased
to $100.1 billion from $85.7 billion. An increase in "other" private payments
(which consists of interest and dividends) accounted for much of the increase,
but direct investment payments and U.S. Government payments (which consists of
interest) also increased.
Compensation of employees
Receipts for compensation of U.S. workers abroad were virtually
unchanged at $0.8 billion, and payments for compensation of foreign workers in
the United States were virtually unchanged at $2.2 billion.
Unilateral current transfers
Unilateral current transfers were net outflows of $19.0 billion in the
fourth quarter, up from net outflows of $14.9 billion in the third; the
increase was mostly attributable to an increase in "private remittances and
other transfers." In the third quarter, "private remittances and other
transfers" decreased as a result of large inflows to U.S. insurance companies
from foreign reinsurance companies as compensation for catastrophic damage
caused by major hurricanes. "Private remittances and other transfers"
rebounded in the fourth quarter, as these inflows dissipated. (For a
discussion of the impact of disasters on the national economic accounts, see
<www.bea.gov/bea/faq/national/disasters.htm>.)
Capital and Financial Account
Capital Account
Capital account transactions were net outflows of $0.4 billion in the
fourth quarter, virtually unchanged from the third.
Financial Account
Net recorded financial inflows--net acquisitions by foreign residents
of assets in the United States less net acquisitions by U.S. residents of
assets abroad--were $183.8 billion in the fourth quarter, up from $128.7
billion in the third. Financial inflows for foreign-owned assets in the United
States increased more than financial outflows for U.S.-owned assets abroad.
U.S.-owned assets abroad
U.S.-owned assets abroad increased $276.5 billion in the fourth
quarter, following an increase of $127.6 billion in the third.
U.S. claims on foreigners reported by U.S. banks increased $74.7
billion in the fourth quarter, following an increase of $55.0 billion in the
third.
Net U.S. purchases of foreign securities were $27.2 billion in the
fourth quarter, up from $20.3 billion in the third. Net U.S. purchases of
foreign stocks were $14.1 billion, down from $17.1 billion. Net U.S. purchases
of foreign bonds were $13.1 billion, up from $3.2 billion.
Net financial outflows for U.S. direct investment abroad were $101.3
billion in the fourth quarter, up from $43.3 billion in the third. A shift to
large net equity capital outflows from small net inflows and an increase in
reinvested earnings more than offset an increase in net intercompany debt
inflows.
U.S. official reserve assets decreased $0.7 billion in the fourth
quarter, following a decrease of $0.4 billion in the third.
Foreign-owned assets in the United States
Foreign-owned assets in the United States increased $460.2 billion in
the fourth quarter, following an increase of $256.3 billion in the third.
U.S. liabilities to foreigners reported by U.S. banks increased $117.6
billion in the fourth quarter, following an increase of $38.7 billion in the
third.
Net foreign purchases of U.S. Treasury securities were $12.1 billion in
the fourth quarter, up from $0.9 billion in the third.
Net foreign purchases of U.S. securities other than U.S. Treasury
securities were a record $170.2 billion in the fourth quarter, up sharply from
$93.0 billion in the third. Net foreign purchases of U.S. stocks were $45.5
billion, up from $4.8 billion. Net foreign purchases of U.S. corporate bonds
were $69.4 billion, down from $82.5 billion. Net foreign purchases of
federally sponsored agency bonds were a record $55.3 billion, up from $5.7
billion.
Net financial inflows for foreign direct investment in the United
States were $36.3 billion in the fourth quarter, up slightly from $35.9 billion
in the third. An increase in reinvested earnings and a shift to net inflows on
intercompany debt from net outflows more than offset a decrease in net equity
capital inflows.
Foreign official assets in the United States increased $82.0 billion in
the fourth quarter, following an increase of $72.0 billion in the third.
Net U.S. currency shipments to foreigners were $5.3 billion in the
fourth quarter, up from $2.6 billion in the third.
The statistical discrepancy--errors and omissions in recorded
transactions--was a positive $4.5 billion in the fourth quarter, compared with
a positive $37.5 billion in the third.
In the fourth quarter, the U.S. dollar depreciated 5 percent on a
trade-weighted quarterly average basis against a group of 7 major currencies.
The Year 2004
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
$665.9 billion in 2004 from $530.7 billion in 2003. An increase in the deficit
on goods to $665.5 billion from $547.6 billion accounted for most of the
increase. Other contributors to the increase in the deficit were a decrease in
the surplus on income to $24.1 billion from $33.3 billion, an increase in net
outflows on unilateral current transfers to $72.9 billion from $67.4 billion,
and a decrease in the surplus on services to $48.4 billion from $51.0 billion.
As a share of U.S. GDP, the deficit rose from 4.8 percent in 2003 to 5.7
percent in 2004.
Goods and services
The deficit on goods and services increased to $617.1 billion in 2004
from $496.5 billion in 2003.
Goods
The deficit on goods increased to $665.5 billion in 2004 from $547.6
billion in 2003.
Goods exports increased to $807.6 billion from $713.1 billion. Two-
thirds of the increase was in capital goods and industrial supplies and
materials.
Goods imports increased to $1,473.1 billion from $1,260.7 billion.
One-quarter of the increase was attributable to an increase in petroleum and
petroleum products. Among nonpetroleum products, the largest increases were in
nonpetroleum industrial supplies and materials, capital goods, and consumer
goods.
Services
The surplus on services decreased to $48.4 billion in 2004 from $51.0
billion in 2003.
Services exports increased to $339.6 billion from $307.4 billion. The
largest increases were in travel and in "other" private services (such as
business, professional, and technical services, and financial services).
Services imports increased to $291.2 billion from $256.3 billion. The
largest increases were in "other" transportation (such as freight and port
services), "other" private services, and travel.
Income
The surplus on income decreased to $24.1 billion in 2004 from $33.3
billion in 2003.
Investment income
Income receipts on U.S.-owned assets abroad increased to $365.9 billion
from $291.4 billion. The increase was more than accounted for by direct
investment receipts and "other" private receipts (which consists of interest
and dividends).
Income payments on foreign-owned assets in the United States increased
to $336.1 billion from $252.6 billion. Direct investment payments, "other"
private payments, and U.S. Government payments all increased.
Compensation of employees
Receipts for compensation of U.S. workers abroad increased slightly
to $3.1 billion, and payments for compensation of foreign workers in the United
States increased to $8.9 billion from $8.5 billion.
Unilateral current transfers
Unilateral current transfers were net outflows of $72.9 billion in
2004, up from net outflows of $67.4 billion in 2003.
Capital and Financial Account
Capital Account
Capital account transactions were net outflows of $1.5 billion in 2004,
down from net outflows of $3.1 billion in 2003.
Financial Account
Net recorded financial inflows--net acquisitions by foreign residents
of assets in the United States less net acquisitions by U.S. residents of
assets abroad--were $615.5 billion in 2004, up from $545.8 billion in 2003.
Financial inflows for foreign-owned assets in the United States increased more
than financial outflows for U.S.-owned assets abroad.
U.S.-owned assets abroad
U.S.-owned assets abroad increased $817.7 billion in 2004, compared
with an increase of $283.4 billion in 2003.
U.S. claims on foreigners reported by U.S. banks increased $353.8
billion in 2004, compared with an increase of $10.4 billion in 2003.
Net U.S. purchases of foreign securities were $90.8 billion in 2004,
compared with $72.3 billion in 2003. Net U.S. purchases of foreign stocks were
$93.0 billion, down from $100.4 billion; these transactions included stock
swaps related to cross-border mergers and acquisitions. Net U.S. sales of
foreign bonds were $2.2 billion, down from $28.1 billion.
Net financial outflows for U.S. direct investment abroad were $248.5
billion in 2004, up from $173.8 billion in 2003. Net equity outflows and
reinvested earnings both increased strongly, but were partly offset by a shift
to net inflows from net outflows for net intercompany debt.
U.S. official reserve assets decreased $2.8 billion in 2004, following
a decrease of $1.5 billion in 2003.
Foreign-owned assets in the United States
Foreign-owned assets in the United States increased $1,433.2 billion in
2004, compared with an increase of $829.2 billion in 2003.
U.S. liabilities to foreigners reported by U.S. banks increased $338.2
billion in 2004, following an increase of $75.6 billion in 2003.
Net foreign purchases of U.S. securities other than U.S. Treasury
securities were $414.1 billion in 2004, up from $251.0 billion in 2003.
Transactions in U.S. federally sponsored agency bonds shifted to net purchases
of $103.6 billion from net sales of $13.4 billion. Net purchases of corporate
bonds were $254.2 billion, up from $227.1 billion. Net foreign purchases of
stocks were $56.2 billion, up from $37.3 billion; these transactions included
stock swaps related to cross-border mergers and acquisitions.
Net foreign purchases of U.S. Treasury securities were $108.1 billion
in 2004, down from $113.4 billion in 2003.
Net financial inflows for foreign direct investment in the United
States were $115.5 billion in 2004, up from $39.9 billion in 2003. Reinvested
earnings increased strongly, net intercompany debt outflows decreased, and net
equity capital inflows increased slightly.
Foreign official assets in the United States increased $355.3 billion
in 2004, following an increase of $248.6 billion in 2003.
Net U.S. currency shipments to foreigners were $14.8 billion in 2004,
down from $16.6 billion in 2003.
The statistical discrepancy--errors and omission in recorded
transactions--was a positive $51.9 billion in 2004, compared with a negative
$12.0 billion in 2003.
In 2004, the U.S. dollar depreciated 8 percent on a trade-weighted
yearly average basis against a group of 7 major currencies.
Revisions
The first three quarters of 2004 were revised to reflect revised
seasonal adjustments and, for the third quarter, receipt of new or revised
data. Revisions to the first and second quarters were small. In the third
quarter, the current-account deficit was revised to $165.9 billion from $164.7
billion. The goods deficit was revised to $167.0 billion from $166.7; the
services surplus was revised to $11.2 billion from $11.4 billion; the income
surplus was revised to $4.9 billion from $5.3 billion; and unilateral current
transfers were revised to net outflows of $14.9 billion from net outflows of
$14.6 billion. Net recorded financial inflows were revised to $128.7 billion
from $153.2 billion.
* * *
Release dates in 2005:
Fourth quarter and year 2004.................March 16, 2005 (Wednesday)
First quarter 2005...............................June 17, 2005 (Friday)
Second quarter 2005.........................September 16, 2005 (Friday)
Third quarter 2005...........................December 16, 2005 (Friday)
* * *
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.
March 16, 2005
Table 1. U.S. International Transactions
[Millions of dollars, quarters seasonally adjusted]
Change: 2003 2004 Change:
(Credits +, debits -) 2003 2004p 2003-2004 2004
IV Ir IIr IIIr IVp III-IV
Current account
1 Exports of goods and services and income receipts............................... 1,314,888 1,516,169 201,281 352,336 360,045 372,895 382,867 400,363 17,496
2 Exports of goods and services............................................... 1,020,503 1,147,181 126,678 268,306 276,620 284,587 290,089 295,885 5,796
3 Goods, balance of payments basis........................................ 713,122 807,610 94,488 186,858 194,322 199,717 205,013 208,558 3,545
4 Services................................................................ 307,381 339,571 32,190 81,448 82,298 84,870 85,076 87,327 2,251
5 Transfers under U.S. military agency sales contracts................ 12,491 13,571 1,080 3,358 3,290 3,668 3,301 3,312 11
6 Travel.............................................................. 64,509 74,768 10,259 18,071 18,001 18,740 18,547 19,480 933
7 Passenger fares..................................................... 15,693 18,939 3,246 4,310 4,534 4,724 4,760 4,921 161
8 Other transportation................................................ 31,833 37,047 5,214 8,548 9,070 9,215 9,150 9,612 462
9 Royalties and license fees.......................................... 48,227 51,341 3,114 12,481 12,478 12,586 12,950 13,326 376
10 Other private services.............................................. 133,818 143,150 9,332 34,477 34,741 35,750 36,179 36,481 302
11 U.S. Government miscellaneous services.............................. 810 755 -55 203 184 187 189 195 6
12 Income receipts............................................................. 294,385 368,988 74,603 84,030 83,425 88,308 92,778 104,478 11,700
13 Income receipts on U.S.-owned assets abroad............................. 291,354 365,886 74,532 83,239 82,666 87,565 91,992 103,664 11,672
14 Direct investment receipts.......................................... 187,522 237,564 50,042 56,843 55,448 57,898 58,650 65,570 6,920
15 Other private receipts.............................................. 99,135 125,295 26,160 25,074 26,433 29,055 32,521 37,286 4,765
16 U.S. Government receipts............................................ 4,697 3,027 -1,670 1,322 785 612 821 808 -13
17 Compensation of employees............................................... 3,031 3,102 71 791 759 743 786 814 28
18 Imports of goods and services and income payments...............................-1,778,117 -2,109,181 -331,064 -461,679 -486,803 -519,271 -533,828 -569,278 -35,450
19 Imports of goods and services...............................................-1,517,011 -1,764,256 -247,245 -393,800 -415,459 -435,909 -445,953 -466,936 -20,983
20 Goods, balance of payments basis........................................-1,260,674 -1,473,087 -212,413 -326,299 -345,376 -363,583 -372,028 -392,100 -20,072
21 Services................................................................ -256,337 -291,169 -34,832 -67,501 -70,083 -72,326 -73,925 -74,836 -911
22 Direct defense expenditures......................................... -25,117 -28,238 -3,121 -6,817 -6,824 -7,143 -7,239 -7,032 207
23 Travel.............................................................. -56,613 -64,590 -7,977 -15,102 -15,574 -16,351 -16,378 -16,287 91
24 Passenger fares..................................................... -20,957 -23,310 -2,353 -5,563 -5,608 -5,779 -5,900 -6,023 -123
25 Other transportation................................................ -44,768 -54,173 -9,405 -11,551 -13,055 -13,056 -13,402 -14,660 -1,258
26 Royalties and license fees.......................................... -20,049 -22,868 -2,819 -5,304 -5,225 -5,618 -6,318 -5,708 610
27 Other private services.............................................. -85,829 -94,736 -8,907 -22,407 -23,013 -23,559 -23,854 -24,310 -456
28 U.S. Government miscellaneous services.............................. -3,004 -3,254 -250 -757 -784 -820 -834 -816 18
29 Income payments............................................................. -261,106 -344,925 -83,819 -67,879 -71,344 -83,362 -87,875 -102,342 -14,467
30 Income payments on foreign-owned assets in the United States............ -252,573 -336,064 -83,491 -65,713 -69,193 -81,088 -85,666 -100,115 -14,449
31 Direct investment payments.......................................... -68,657 -105,252 -36,595 -18,289 -20,775 -26,735 -27,282 -30,458 -3,176
32 Other private payments.............................................. -111,874 -146,674 -34,800 -29,099 -29,361 -33,853 -36,759 -46,701 -9,942
33 U.S. Government payments............................................ -72,042 -84,138 -12,096 -18,325 -19,057 -20,500 -21,625 -22,956 -1,331
34 Compensation of employees............................................... -8,533 -8,861 -328 -2,166 -2,151 -2,274 -2,209 -2,227 -18
35 Unilateral current transfers, net............................................... -67,439 -72,928 -5,489 -17,617 -20,720 -18,332 -14,897 -18,983 -4,086
36 U.S. Government grants...................................................... -21,865 -23,187 -1,322 -4,753 -7,744 -4,910 -4,876 -5,657 -781
37 U.S. Government pensions and other transfers................................ -5,341 -6,235 -894 -1,352 -1,554 -1,556 -1,548 -1,578 -30
38 Private remittances and other transfers..................................... -40,233 -43,506 -3,273 -11,512 -11,422 -11,866 -8,473 -11,748 -3,275
March 16, 2005
Table 1. U.S. International Transactions (Continued)
[Millions of dollars, quarters seasonally adjusted]
Change: 2003 2004 Change:
(Credits +, debits -) 2003 2004p 2003-2004 2004
IV Ir IIr IIIr IVp III-IV
Capital and financial account
Capital account
39 Capital account transactions, net............................................... -3,079 -1,477 1,602 -300 -396 -324 -374 -383 -9
Financial account
40 U.S.-owned assets abroad, net (increase/financial outflow (-)).................. -283,414 -817,676 -534,262 -61,647 -307,170 -106,472 -127,581 -276,453 -148,872
41 U.S. official reserve assets, net........................................... 1,523 2,805 1,282 2,221 557 1,122 429 697 268
42 Gold.................................................................... .... .... .... .... .... .... .... .... ....
43 Special drawing rights.................................................. 601 -398 -999 -97 -100 -90 -98 -110 -12
44 Reserve position in the International Monetary Fund..................... 1,494 3,826 2,332 2,435 815 1,345 676 990 314
45 Foreign currencies...................................................... -572 -623 -51 -117 -158 -133 -149 -183 -34
46 U.S. Government assets, other than official reserve assets, net............. 537 1,269 732 -309 727 -2 -10 554 564
47 U.S. credits and other long-term assets................................. -7,279 -3,026 4,253 -1,728 -561 -668 -1,270 -527 743
48 Repayments on U.S. credits and other long-term assets................... 7,981 4,245 -3,736 1,526 1,374 544 1,299 1,028 -271
49 U.S. foreign currency holdings and U.S. short-term assets, net.......... -165 50 215 -107 -86 122 -39 53 92
50 U.S. private assets, net.................................................... -285,474 -821,750 -536,276 -63,559 -308,454 -107,592 -128,000 -277,704 -149,704
51 Direct investment....................................................... -173,799 -248,508 -74,709 -53,705 -48,049 -55,919 -43,253 -101,287 -58,034
52 Foreign securities...................................................... -72,337 -90,840 -18,503 -25,835 -16,524 -26,844 -20,290 -27,182 -6,892
53 U.S. claims on unaffiliated foreigners reported by
U.S. nonbanking concerns............................................ -28,932 -128,589 -99,657 -31,090 -56,761 12,122 -9,447 -74,503 -65,056
54 U.S. claims reported by U.S. banks, not included elsewhere.............. -10,406 -353,813 -343,407 47,071 -187,120 -36,951 -55,010 -74,732 -19,722
55 Foreign-owned assets in the United States, net (increase/financial inflow (+)).. 829,173 1,433,171 603,998 230,311 445,608 271,031 256,283 460,246 203,963
56 Foreign official assets in the United States, net........................... 248,573 355,252 106,679 83,679 127,864 73,349 72,004 82,035 10,031
57 U.S. Government securities.............................................. 194,568 287,495 92,927 81,472 114,708 65,240 61,833 45,714 -16,119
58 U.S. Treasury securities............................................ 169,685 261,540 91,855 72,787 101,692 62,979 54,693 42,176 -12,517
59 Other............................................................... 24,883 25,955 1,072 8,685 13,016 2,261 7,140 3,538 -3,602
60 Other U.S. Government liabilities....................................... -564 -314 250 -70 -140 -89 501 -586 -1,087
61 U.S. liabilities reported by U.S. banks, not included elsewhere......... 49,420 55,442 6,022 524 11,854 6,189 6,354 31,045 24,691
62 Other foreign official assets........................................... 5,149 12,629 7,480 1,753 1,442 2,009 3,316 5,862 2,546
63 Other foreign assets in the United States, net.............................. 580,600 1,077,919 497,319 146,632 317,744 197,682 184,279 378,211 193,932
64 Direct investment....................................................... 39,890 115,530 75,640 10,719 10,485 32,854 35,861 36,327 466
65 U.S. Treasury securities................................................ 113,432 108,138 -5,294 4,714 65,438 29,684 908 12,108 11,200
66 U.S. securities other than U.S. Treasury securities..................... 250,981 414,084 163,103 83,761 62,064 88,843 93,021 170,156 77,135
67 U.S. currency........................................................... 16,640 14,827 -1,813 7,487 -1,800 8,754 2,560 5,313 2,753
68 U.S. liabilities to unaffiliated foreigners reported by
U.S. nonbanking concerns............................................ 84,014 87,113 3,099 4,140 40,723 -3,603 13,275 36,718 23,443
69 U.S. liabilities reported by U.S. banks, not included elsewhere......... 75,643 338,227 262,584 35,811 140,834 41,150 38,654 117,589 78,935
70 Statistical discrepancy (sum of above items with sign reversed)................. -12,012 51,922 63,934 -41,404 9,436 473 37,530 4,488 -33,042
Memoranda:
71 Balance on goods (lines 3 and 20)............................................... -547,552 -665,477 -117,925 -139,441 -151,054 -163,866 -167,015 -183,542 -16,527
72 Balance on services (lines 4 and 21)............................................ 51,044 48,402 -2,642 13,947 12,215 12,544 11,151 12,491 1,340
73 Balance on goods and services (lines 2 and 19).................................. -496,508 -617,075 -120,567 -125,494 -138,839 -151,322 -155,864 -171,051 -15,187
74 Balance on income (lines 12 and 29)............................................. 33,279 24,063 -9,216 16,151 12,081 4,946 4,903 2,136 -2,767
75 Unilateral current transfers, net (line 35)..................................... -67,439 -72,928 -5,489 -17,617 -20,720 -18,332 -14,897 -18,983 -4,086
76 Balance on current account (lines 1, 18, and 35 or lines 73, 74, and 75)........ -530,668 -665,940 -135,272 -126,960 -147,478 -164,708 -165,858 -187,898 -22,040
r Revised. p Preliminary.
NOTE: Details may not add to totals because of rounding. Source: U. S. Bureau of Economic Analysis
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