News Release

EMBARGOED UNTIL RELEASE AT 8:30 A.M. EDT, Thursday, September 15, 2016
BEA 16-48

U.S. International Transactions, 2nd quarter 2016

                                    Current Account Balance

The U.S. current-account deficit decreased to $119.9 billion (preliminary) in the second
quarter of 2016 from $131.8 billion (revised) in the first quarter of 2016, according to
statistics released by the Bureau of Economic Analysis (BEA). The deficit decreased to 2.6
percent of current-dollar gross domestic product (GDP) from 2.9 percent in the first quarter.

The $12.0 billion decrease in the deficit reflected an $8.9 billion increase in the surplus on
primary income to $42.9 billion, a $3.1 billion decrease in the deficit on secondary income to
$37.6 billion, and a $0.4 billion increase in the surplus on services to $61.5 billion.  These
changes were partly offset by a $0.5 billion increase in the deficit on goods to $186.7 billion.

                           Current Account Transactions (tables 1-5)

Exports of goods and services and income receipts

Exports of goods and services and income receipts increased $18.0 billion in the second quarter
to $777.0 billion.

   * Primary income receipts increased $10.4 billion to $198.9 billion, primarily reflecting an
     increase in direct investment income.

   * Goods exports increased $6.1 billion to $360.2 billion, reflecting increases in industrial
     supplies and materials, primarily in petroleum and products, and foods, feeds, and
     beverages.  A decrease in consumer goods except food and automotive partly offset these
     increases.

Imports of goods and services and income payments

Imports of goods and services and income payments increased $6.1 billion to $896.9 billion.

   * Goods imports increased $6.5 billion to $546.9 billion, reflecting increases in imports of
     industrial supplies and materials, largely in energy products, and capital goods except
     automotive. These increases were partly offset by a decrease in imports of consumer goods,
     except food and automotive, particularly other household goods, including cell phones.

   * Primary income payments increased $1.4 billion to $155.9 billion, reflecting an increase
     in direct investment income.

   * Secondary income payments decreased $2.4 billion to $69.8 billion, reflecting a decrease
     in U.S. government transfers, both in U.S. government grants and in U.S. government
     pensions and other transfers.

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

Net U.S. borrowing measured by financial-account transactions was $31.1 billion in the second
quarter, a $14.3 billion decrease from net borrowing of $45.4 billion in the first quarter. An
increase in net U.S. acquisition of financial assets excluding financial derivatives was mostly
offset by an increase in net U.S. incurrence of liabilities excluding financial derivatives.
Net transactions in financial derivatives other than reserves reflected more net lending in the
second quarter than in the first quarter.

Financial assets

Net U.S. acquisition of financial assets excluding financial derivatives increased $233.8
billion to $293.7 billion.

   * Transactions in portfolio investment assets increased $167.3 billion to net U.S.
     acquisition of $109.9 billion, as a shift to net acquisition of equity and investment fund
     shares more than offset a shift to net sales of debt securities.

   * Net U.S. acquisition of direct investment assets increased $38.7 billion to $106.1 billion,
     largely reflecting an increase in net acquisition of equity.

   * Net U.S acquisition of other investment assets increased $26.5 billion to $77.5 billion,
     as a shift to net provision of loans to foreigners exceeded a shift to net withdrawal of
     U.S. residents’ deposits abroad (in currency and deposits).

Liabilities

Net U.S. incurrence of liabilities excluding financial derivatives increased $232.2 billion to
$350.4 billion.

   * Net U.S. incurrence of other investment liabilities increased $143.9 billion to $192.0
     billion, mostly reflecting a shift to net incurrence of deposit liabilities in currency
     and deposits.

   * Net U.S. incurrence of direct investment liabilities increased $68.3 billion to $159.6
     billion, reflecting increases in net incurrence of both equity and debt instrument
     liabilities.

Financial derivatives

Transactions in financial derivatives other than reserves reflected second-quarter net lending
of $25.6 billion, a $12.6 billion increase from the first quarter.

                               Statistical Discrepancy (table 1)

The statistical discrepancy increased $2.3 billion in the second quarter to $88.8 billion.

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                                           Revisions

        Revisions to First-Quarter 2016 International Transactions Accounts Aggregates
                          [Billions of dollars, seasonally adjusted]

                                                                      Estimate
                                                       Preliminary                Revised
   Current-account balance                                  -124.7                 -131.8
      Goods balance                                         -186.4                 -186.3
      Services balance                                        64.6                   61.1
      Primary-income balance                                  37.5                   34.0
      Secondary-income balance                               -40.3                  -40.6
   Net lending from financial-account transactions           -35.0                  -45.4
   Statistical discrepancy                                    89.6                   86.5

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                      Next release: December 15, 2016 at 8:30 A.M. EST
                     U.S. International Transactions, Third Quarter 2016

                                    *          *          *

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         Updated Statistics on U.S. International Services and New Geographic Detail

BEA will release its most detailed annual statistics on trade in services in October. This year's
release will include expanded geographic detail and statistics on information and communications
technology (ICT) and potentially ICT-enabled services.

For more information, see Updated Statistics on U.S. International Services and New Geographic Detail
(www.bea.gov/international/international_services_statistics_2016.htm).

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