NOTE: See the navigation bar at the right side of the news release text for a link to an important note about the
comprehensive restructuring of the International Economic Accounts. Also see links
to data tables, contact personnel and their telephone numbers, and supplementary materials.


 

                                       Current Account

The U.S. current-account deficita net measure of transactions between the United States and the
rest of the world in goods, services, primary income (investment income and compensation), and
secondary income (current transfers)increased to $100.3 billion (preliminary) in the third
quarter of 2014 from $98.4 billion (revised) in the second quarter. The deficit remained at 2.3
percent of current-dollar gross domestic product (GDP). The increase in the current-account
deficit was more than accounted for by an increase in the deficit on secondary income. In
addition, the surplus on services decreased. These changes were partly offset by a decrease in
the deficit on goods and an increase in the surplus on primary income.

Goods and services

      The deficit on goods and services decreased to $124.3 billion in the third quarter from
$131.2 billion in the second quarter.

      Goods  The deficit on goods decreased to $182.1 billion in the third quarter from $189.3
billion in the second quarter.

      Goods exports increased to $414.1 billion from $408.7 billion. Exports increased in four
of the six major general-merchandise end-use categories and in nonmonetary gold. The largest
general-merchandise increases were in industrial supplies and materials; automotive vehicles,
parts, and engines; and capital goods except automotive. The largest decrease was in foods,
feeds, and beverages. The increase in industrial supplies and materials was accounted for by
increases in energy products and metals and nonmetallic products. The increase in automotive
vehicles, parts, and engines reflected increases in all subcategories. The largest increases
in capital goods except automotive were in telecommunications equipment and in other industrial
machinery, particularly in machinery for manufacture of semiconductors. Much of the decrease in
exports of foods, feeds, and beverages was due to a decrease in exports of grains and preparations
(ITA Table 2.1).

      Goods imports decreased to $596.2 billion from $598.0 billion. Imports decreased in three
of the six major general-merchandise end-use categories. The largest decreases were in industrial
supplies and materials and in consumer goods except food and automotive. The largest increase
was in capital goods except automotive. Most of the decrease in industrial supplies and materials
was due to a decrease in imports of petroleum and products. The decrease in consumer goods except
food and automotive was more than accounted for by a decrease in imports of durable goods, most
of which was in cell phones. The increase in capital goods except automotive mostly reflected
increases in machinery and equipment except consumer-type and in civilian aircraft, complete,
all types (ITA Table 2.1).

      Services  The surplus on services decreased to $57.7 billion in the third quarter from
$58.1 billion in the second quarter.

      Services exports were nearly unchanged at $177.9 billion in the third quarter. Exports
increased in five of the nine major services categories. The largest increase was in other
business services, much of which was in research and development services. The largest decrease
was in financial services, much of which was in securities brokerage, underwriting, and related
services (ITA Table 3.1).

      Services imports increased to $120.1 billion from $119.8 billion. Imports increased in six
of the nine major services categories. The largest increase was in other business services,
reflecting combined increases in imports of research and development services and professional
and management consulting services (ITA Table 3.1).

Primary income

      The surplus on primary income increased to $59.0 billion in the third quarter from $54.8
billion in the second quarter.

      Investment income  Income receipts from foreigners on U.S. holdings of financial assets
abroad increased to $207.6 billion from $202.9 billion (ITA Table 4.1).
The increase reflected increases in direct investment incomemostly from manufacturing affiliatesand portfolio
investment income receipts. The increase in direct investment income receipts was mostly due to
higher income on equity (ITA Table 4.2). The increase in portfolio investment income receipts was mostly due to 
increased interest on long-term debt securities (ITA Table 4.3).

      Income payments to foreigners on U.S. liabilities increased to $146.3 billion from $145.8
billion (ITA Table 4.1). The increase was more than accounted for by an increase in portfolio investment income 
payments, reflecting increased interest on long-term debt securities (ITA Table 4.3).
The increase in portfolio investment income payments was partly offset by a decrease in direct
investment income payments. The decrease in direct investment income payments was largely in
income on equity; interest payments also decreased (ITA Table 4.2).

      Compensation of employees  Receipts for compensation of U.S. residents paid by nonresidents
was nearly unchanged at $1.7 billion in the third quarter. Payments for compensation of foreign
residents paid by U.S. residents were nearly unchanged at $4.0 billion in the third quarter.

Secondary income (current transfers)

      The deficit on secondary income increased to $34.9 billion in the third quarter from $22.0
billion in the second quarter. Secondary income receipts and payments include U.S. government
and private transfers, such as U.S. government grants and pensions, fines and penalties,
withholding taxes, personal transfers (remittances), insurance-related transfers, and other
current transfers.

      Secondary income receipts decreased to $27.8 billion from $40.1 billion after increasing
in the second quarter. Second-quarter transactions included unusually large fines and penalties
paid to the U.S. government, a component of U.S. government transfers (ITA Table 5.1).

      Secondary income payments increased to $62.7 billion from $62.1 billion, mostly due to an
increase in private transfers (ITA Table 5.1).

                                       Capital Account

      Capital-account transactions are not available for the third quarter because source data
are not yet available. Third-quarter capital-account transactions will be published with the
release of the fourth-quarter U.S. International Transactions on March 19, 2015. In the second
quarter, capital-account receipts and payments were near zero.

                                      Financial Account

      Net U.S. borrowing measured by financial-account transactions was $22.5 billion in the
third quarter, up from $22.2 billion in the second quarter. Both net U.S. acquisition of financial
assets excluding financial derivatives and net U.S. incurrence of liabilities excluding financial
derivatives were higher than in the second quarter. Net transactions in financial derivatives
other than reserves were negative in the third quarter, much more so than in the second quarter.

Net U.S. acquisition of financial assets excluding financial derivatives

      Net U.S. acquisition of financial assets excluding financial derivatives was $358.2 billion
in the third quarter, up from $241.6 billion in the second quarter.

      Direct investment assets (equity and debt instruments) Net acquisition of direct investment
assets was $93.7 billion in the third quarter, up from $91.1 billion in the second quarter. The
increase was more than accounted for by a shift to net investment in equity other than reinvestment
of earnings. In contrast, net acquisition of (intercompany) debt instrument assets decreased
(ITA Table 6.1).

      Portfolio investment assets (equity and investment fund shares and debt securities) Net
U.S. acquisition of portfolio investment assets abroad (acquisitions in excess of sales) was
$153.4 billion in the third quarter, down from $195.5 billion in the second quarter. Net U.S.
purchases of foreign equity and investment fund shares increased to $127.4 billion from $91.5
billion. Net U.S. purchases of foreign debt securities decreased to $26.0 billion from $104.0
billion, reflecting, in part, a shift to net sales of commercial paper and a decrease of net
purchases of other short-term securities (ITA Table 7.1).

      Other investment assets (currency and deposits, loans, insurance technical reserves, and
trade credit and advances) Net U.S. acquisition of other investment assets abroad (acquisitions
in excess of sales) was $112.0 billion in the third quarter, a shift from net sales of $45.8
billion in the second quarter. The shift to net acquisition reflected shifts to net acquisition
of loans and deposit assets abroad (ITA Table 8.1).

      Reserve assets U.S. holdings of reserve assets abroad decreased $0.9 billion in the third
quarter after increasing $0.8 billion in the second quarter.

Net U.S. incurrence of liabilities excluding financial derivatives

      Net U.S. incurrence of liabilities to foreigners excluding financial derivatives was $356.4
billion in the third quarter, up from $261.0 billion in the second quarter.

      Direct investment liabilities (equity and debt instruments) Net incurrence of direct
investment liabilities to foreigners was $65.4 billion in the third quarter, down from $77.7
billion in the second quarter. The decrease was more than accounted for by a decrease in the
net incurrence of (intercompany) debt instrument liabilities (ITA Table 6.1).

      Portfolio investment liabilities (equity and investment fund shares and debt securities)
Net U.S. incurrence of portfolio investment liabilities to foreigners was $250.9 billion in the
third quarter, up from $67.8 billion in the second quarter. Net foreign purchases of U.S. equity
and investment fund shares were $84.6 billion, up from $3.4 billion. Net foreign purchases of
U.S. debt securities were $166.3 billion, up from $64.3 billion, reflecting an increase in net
purchases of long-term corporate bonds and notes, lower net sales of U.S. Treasury bills and
certificates, and a shift to net purchases of long-term federally sponsored agency securities
(ITA Table 7.1).

      Other investment liabilities (currency and deposits, loans, insurance technical reserves,
trade credit and advances, and special drawing rights allocations) Net U.S. incurrence of other
investment liabilities to foreigners was $40.1 billion in the third quarter, down from $115.5
billion in the second quarter. The third-quarter decrease was mostly due to a decrease in the
net incurrence of liabilities associated with foreign-resident deposits (ITA Table 8.1).

Financial derivatives other than reserves

      Net transactions in financial derivatives other than reserves were $24.3 billion in the
third quarter, representing net borrowing. This was an increase from net borrowing of $2.8
billion in the second quarter. The third-quarter increase reflected the appreciation of the
dollar as over-the-counter and exchange-traded contracts written to hedge currency exposures
resulted in higher net cash receipts to U.S. residents (net borrowing). 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).

Statistical discrepancy

      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 was $77.7 billion in the third quarter compared with $76.2 billion
in the second quarter.

                                  *          *          *

      In the third quarter, the U.S. dollar appreciated 1.9 percent on a trade-weighted quarterly
average basis against a group of 7 major currencies, after depreciating 0.7 percent on the same
basis in the second quarter. From the beginning to the conclusion of the third quarter, the U.S.
dollars nominal trade-weighted exchange value appreciated 7.1 percent against the major currencies
index, as measured by the Federal Reserve. Exchange rate data are based on Federal Reserve Statistical
Release H.10.

                                  *          *          *

Revisions to second quarter 2014

      The second-quarter 2014 international transactions are revised from previously published
statistics. The current-account deficit in the second quarter of 2014 is revised downward to
$98.4 billion from $98.5 billion. The goods deficit is revised upward to $189.3 billion from
$189.2 billion. The services surplus is revised downward to $58.1 billion from $58.9 billion.
The primary income surplus is revised upward to $54.8 billion from $53.1 billion. The secondary
income deficit is revised upward to $22.0 billion from $21.4 billion. Second-quarter net borrowing
from financial-account transactions is revised upward to $22.2 billion from $17.6 billion. Net
U.S. acquisition of financial assets excluding financial derivatives is revised upward to $241.6
billion from $232.7 billion, and net U.S. incurrence of liabilities excluding financial derivatives
is revised upward to $261.0 billion from $247.4 billion.

                                  *          *          *
        Release dates in 2015:

        Fourth Quarter and Year 2014..................................March 19, 2015 (Thursday)
        First Quarter 2015 and Annual Revisions........................June 18, 2015 (Thursday)
        Second Quarter 2015.......................................September 17, 2015 (Thursday)
        Third Quarter 2015.........................................December 17, 2015 (Thursday)

                                  *          *          *

      BEAs national, international, regional, and industry statistics; the SURVEY OF CURRENT
BUSINESS; and BEA news releases are available without charge on BEAs Web site at www.bea.gov.
At the site, you can also subscribe to receive free e-mail summaries of BEA releases and announcements.

---------------

NOTE: This news release is available on BEA's Web site  along with Highlights related to this release, the latest 
detailed statistics for U.S. international transactions, and a description of the estimation methods used to compile them. 
The third-quarter statistics in this release are preliminary and  will be revised on March 19, 2015. All links in the text 
of this release -- including archived versions of this release -- refer to the latest available statistics.