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News Release: U.S. International Transactions


The tables in this release are available in an XLS spreadsheet and the entire release is available in PDF format.



FOR WIRE TRANSMISSION: 8:30 A.M. EST, THURSDAY, DECEMBER 16, 2004
Douglas B. Weinberg:        (202) 606-9590                            BEA 04-57
Recorded Message:                 606-5362


             U.S. International Transactions: Third Quarter 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
slightly to $164.7 billion in the third quarter of 2004 (preliminary) from
$164.4 billion (revised) in the second quarter.  An increase in the deficit on
goods and a decrease in the surplus on services offset a decrease in net
outflows for unilateral current transfers and an increase in the surplus on
income.

Goods and services

        The deficit on goods and services increased to $155.3 billion in the
third quarter from $151.1 billion in the second.

        Goods

        The deficit on goods increased to $166.7 billion in the third quarter
from $163.6 billion in the second quarter.

        Goods exports increased to $204.6 billion from $199.3 billion.  The
increase was mostly attributable to increases in industrial supplies and
materials, in automotive vehicles, engines, and parts, and in capital goods.

        Goods imports increased to $371.3 billion from $362.9 billion.
Increases in petroleum and petroleum products, in nonpetroleum industrial
supplies and materials, and in capital goods more than offset a decrease in
consumer goods.

        Services

        The surplus on services decreased to $11.4 billion in the third quarter
from $12.5 billion in the second.

        Services receipts increased to $85.0 billion from $84.7 billion.  The
largest increases were in royalties and license fees, in "other" transportation
(such as freight and port services), and in travel.

        Services payments increased to $73.6 billion from $72.2 billion.  The
largest increases were in royalties and license fees, in "other"
transportation, in travel, and in passenger fares.

Income
        The surplus on income increased to $5.3 billion in the third quarter
from $5.0 billion in the second.

        Investment income

        Income receipts on U.S.-owned assets abroad increased to $92.1 billion
from $87.7 billion.  The increase was mostly accounted for by increases in
"other" private receipts (which consists of interest and dividends) and in
direct investment receipts.

        Income payments on foreign-owned assets in the United States increased
to $85.4 billion from $81.1 billion.  "Other" private payments, U.S. Government
payments, and direct investment payments all increased.

        Compensation of employees

        Receipts for compensation of U.S. workers abroad increased slightly to
$0.8 billion from $0.7 billion, and payments for compensation of foreign
workers in the United States decreased slightly to $2.2 billion from
$2.3 billion.

Unilateral current transfers

        Unilateral current transfers were net outflows of $14.6 billion in the
third quarter, down from net outflows of $18.3 billion in the second; the
decrease was mostly attributable to a decrease in "private remittances and
other transfers."  The decrease in this category results from an increase in
inflows to U.S. insurance companies from foreign reinsurance companies,
arising from unusually large claims for compensation for catastrophic damage
caused by major hurricanes during the quarter.  (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
third quarter, up slightly from net outflows of $0.3 billion in the second.

                              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 $153.2 billion in the third quarter, down from $164.9
billion in the second.  Financial outflows for U.S.-owned assets abroad
increased more than financial inflows for foreign-owned assets in the United
States.

U.S.-owned assets abroad

        U.S.-owned assets abroad increased $133.2 billion in the third quarter,
following an increase of $105.8 billion in the second.

        U.S. claims on foreigners reported by U.S. banks increased
$60.3 billion in the third quarter, following an increase of $37.0 billion in
the second.

        Net U.S. purchases of foreign securities were $15.0 billion in the
third quarter, down from $26.8 billion in the second.  Net U.S. purchases of
foreign stocks were $9.0 billion, down from $40.4 billion.  Transactions in
foreign bonds shifted to net U.S. purchases of $6.0 billion from net U.S. sales
of $13.5 billion.

        Net financial outflows for U.S. direct investment abroad were
$43.5 billion in the third quarter, down from $55.3 billion in the second.  The
decrease was more than accounted for by a decrease in net equity capital
outflows.  In contrast, net intercompany debt inflows decreased, and reinvested
earnings increased.

        U.S. official reserve assets decreased $0.4 billion in the third
quarter, following a decrease of $1.1 billion in the second.

Foreign-owned assets in the United States

        Foreign-owned assets in the United States increased $286.4 billion in
the third quarter, following an increase of $270.7 billion in the second.

        U.S. liabilities to foreigners reported by U.S. banks increased
$46.6 billion in the third quarter, following an increase of $41.2 billion in
the second.

        Net foreign purchases of U.S. Treasury securities were $14.1 billion in
the third quarter, down from $29.7 billion in the second.

        Net foreign purchases of U.S. securities other than U.S. Treasury
securities were $90.5 billion in the third quarter, up from $88.8 billion in
the second.  Net foreign purchases of U.S. stocks were $2.9 billion, up from
$1.8 billion.  Net foreign purchases of U.S. corporate bonds were a record
$84.7 billion, up from $51.1 billion.  Net foreign purchases of federally
sponsored agency bonds were $2.9 billion, down from $35.9 billion.

        Net financial inflows for foreign direct investment in the United
States were $53.1 billion in the third quarter, up from $32.6 billion in the
second.  A shift to net inflows on intercompany debt from net outflows and a
small increase in reinvested earnings more than offset a decrease in net equity
capital inflows.

        Foreign official assets in the United States increased $60.1 billion in
the third quarter, following an increase of $73.3 billion in the second.

        Net U.S. currency shipments to foreigners were $2.6 billion in the
third quarter, down from $8.8 billion in the second.

        The statistical discrepancy--errors and omissions in recorded
transactions--was a positive $11.8 billion in the third quarter, compared with
a negative $0.2 billion in the second.

        In the third quarter, the U.S. dollar depreciated 2 percent on a
trade-weighted quarterly average basis against a group of 7 major currencies.

                                   Revisions

        The second-quarter international transactions are revised from
previously published estimates.  The current-account deficit was revised to
$164.4 billion from $166.2 billion.  The goods deficit was unrevised at
$163.6 billion; the services surplus was revised to $12.5 billion from
$13.3 billion; the surplus on income was revised to $5.0 billion from
$2.6 billion; and unilateral current transfers were revised to net outflows of
$18.3 billion from $18.5 billion.  Net recorded financial inflows were revised
to $164.9 billion from $146.8 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)

                            *          *          *

        BEA's major national, regional, international, and industry estimates,
the Survey of Current Business, and BEA news releases are available on BEA's
Web site:

                                  www.bea.gov

        Summary BEA estimates are available on recorded messages at the time of
public release at the following telephone numbers:

                (202) 606-5362 U.S. international transactions
                         -5306 Gross domestic product
                         -5303 Personal income and outlays

        Most of BEA's estimates and analyses are published in the Survey of
Current Business, BEA's monthly journal.  Subscriptions and single copies of
the printed Survey are for sale by the Superintendent of Documents, U.S.
Government Printing Office.  Internet: <bookstore.gpo.gov> phone:
(202)512-1800; fax: (202)512-2250; mail: Stop SSOP, Washington, DC 20402-0001.

                                                                                                                                                              December 16, 2004

      Table 1. U.S. International Transactions
      [Millions of dollars, quarters seasonally adjusted]

                                                                                                           2003                                2004                    Change:
                                        (Credits +, debits -)                                     2003                                                                  2004
                                                                                                           I       II       III      IV        I      IIr     IIIp     II-III

                                          Current account

       1 Exports of goods and services and income receipts.................................  1,314,888  315,676  317,367  329,508  352,336  359,604  372,463  382,498   10,035

       2     Exports of goods and services.................................................  1,020,503  247,999  248,474  255,723  268,306  276,076  284,044  289,619    5,575

       3         Goods, balance of payments basis..........................................    713,122  173,459  174,554  178,251  186,858  193,920  199,315  204,610    5,295

       4         Services..................................................................    307,381   74,540   73,920   77,472   81,448   82,156   84,729   85,009      280
       5             Transfers under U.S. military agency sales contracts..................     12,491    2,827    3,014    3,292    3,358    3,290    3,668    3,348     -320

       6             Travel................................................................     64,509   15,862   14,360   16,216   18,071   17,878   18,617   18,769      152
       7             Passenger fares.......................................................     15,693    3,825    3,522    4,036    4,310    4,527    4,717    4,687      -30
       8             Other transportation..................................................     31,833    7,683    7,709    7,893    8,548    9,060    9,206    9,367      161

       9             Royalties and license fees............................................     48,227   11,628   11,943   12,175   12,481   12,472   12,581   12,928      347
      10             Other private services................................................    133,818   32,513   33,170   33,657   34,477   34,745   35,753   35,722      -31
      11             U.S. Government miscellaneous services................................        810      202      202      203      203      184      187      188        1

      12     Income receipts...............................................................    294,385   67,677   68,893   73,785   84,030   83,528   88,419   92,879    4,460
      13         Income receipts on U.S.-owned assets abroad...............................    291,354   66,936   68,163   73,016   83,239   82,769   87,676   92,093    4,417
      14             Direct investment receipts............................................    187,522   40,748   42,704   47,229   56,843   55,553   58,011   59,013    1,002
      15             Other private receipts................................................     99,135   25,345   24,218   24,498   25,074   26,433   29,055   32,311    3,256
      16             U.S. Government receipts..............................................      4,697      843    1,241    1,289    1,322      783      610      769      159
      17         Compensation of employees.................................................      3,031      741      730      769      791      759      743      786       43

      18 Imports of goods and services and income payments................................. -1,778,117 -437,067 -434,873 -444,497 -461,679 -486,042 -518,510 -532,559  -14,049

      19     Imports of goods and services................................................. -1,517,011 -373,385 -371,854 -377,973 -393,800 -414,678 -435,128 -444,961   -9,833

      20         Goods, balance of payments basis.......................................... -1,260,674 -311,402 -310,087 -312,886 -326,299 -344,688 -362,895 -371,341   -8,446

      21         Services..................................................................   -256,337  -61,983  -61,767  -65,087  -67,501  -69,990  -72,233  -73,620   -1,387
      22             Direct defense expenditures...........................................    -25,117   -5,732   -6,229   -6,339   -6,817   -6,824   -7,143   -7,180      -37

      23             Travel................................................................    -56,613  -14,312  -12,790  -14,409  -15,102  -15,508  -16,285  -16,518     -233
      24             Passenger fares.......................................................    -20,957   -5,007   -4,875   -5,512   -5,563   -5,574   -5,745   -5,871     -126
      25             Other transportation..................................................    -44,768  -10,796  -11,109  -11,312  -11,551  -13,051  -13,053  -13,356     -303

      26             Royalties and license fees............................................    -20,049   -4,629   -4,912   -5,204   -5,304   -5,223   -5,614   -6,265     -651
      27             Other private services................................................    -85,829  -20,762  -21,103  -21,558  -22,407  -23,026  -23,573  -23,621      -48
      28             U.S. Government miscellaneous services................................     -3,004     -745     -749     -753     -757     -784     -820     -809       11

      29     Income payments...............................................................   -261,106  -63,682  -63,019  -66,524  -67,879  -71,364  -83,382  -87,598   -4,216
      30         Income payments on foreign-owned assets in the United States..............   -252,573  -61,557  -60,899  -64,402  -65,713  -69,205  -81,100  -85,393   -4,293
      31             Direct investment payments............................................    -68,657  -15,415  -16,362  -18,589  -18,289  -20,787  -26,747  -27,617     -870
      32             Other private payments................................................   -111,874  -28,146  -26,785  -27,844  -29,099  -29,361  -33,853  -36,248   -2,395
      33             U.S. Government payments..............................................    -72,042  -17,996  -17,752  -17,969  -18,325  -19,057  -20,500  -21,528   -1,028
      34         Compensation of employees.................................................     -8,533   -2,125   -2,120   -2,122   -2,166   -2,159   -2,282   -2,205       77

      35 Unilateral current transfers, net.................................................    -67,439  -16,815  -16,369  -16,639  -17,617  -20,726  -18,344  -14,648    3,696
      36     U.S. Government grants........................................................    -21,865   -5,833   -5,832   -5,447   -4,753   -7,744   -4,910   -4,772      138
      37     U.S. Government pensions and other transfers..................................     -5,341   -1,320   -1,335   -1,334   -1,352   -1,554   -1,556   -1,559       -3
      38     Private remittances and other transfers.......................................    -40,233   -9,662   -9,202   -9,858  -11,512  -11,428  -11,878   -8,317    3,561


                                                                                                                                                             December 16, 2004
      Table 1. U.S. International Transactions (Continued)
      [Millions of dollars, quarters seasonally adjusted]

                                                                                                           2003                                2004                    Change:
                                        (Credits +, debits -)                                     2003                                                                  2004
                                                                                                           I       II       III      IV        I      IIr     IIIp     II-III

                                    Capital and financial account

                                           Capital account

      39 Capital account transactions, net.................................................     -3,079     -406   -1,552     -821     -300     -396     -324     -374      -50

                                          Financial account

      40 U.S.-owned assets abroad, net (increase/financial outflow (-))....................   -283,414 -102,665 -110,962   -8,138  -61,647 -306,729 -105,810 -133,176  -27,366

      41     U.S. official reserve assets, net.............................................      1,523       83     -170     -611    2,221      557    1,122      429     -693
      42         Gold......................................................................       ....     ....     ....     ....     ....     ....     ....     ....     ....
      43         Special drawing rights....................................................        601      897     -102      -97      -97     -100      -90      -98       -8
      44         Reserve position in the International Monetary Fund.......................      1,494     -644       86     -383    2,435      815    1,345      676     -669
      45         Foreign currencies........................................................       -572     -170     -154     -131     -117     -158     -133     -149      -16

      46     U.S. Government assets, other than official reserve assets, net...............        537       53      310      483     -309      727       -2      183      185
      47         U.S. credits and other long-term assets...................................     -7,279   -2,428   -1,591   -1,532   -1,728     -561     -668     -978     -310
      48         Repayments on U.S. credits and other long-term assets.....................      7,981    2,445    1,975    2,035    1,526    1,374      544    1,179      635
      49         U.S. foreign currency holdings and U.S. short-term assets, net............       -165       36      -74      -20     -107      -86      122      -18     -140

      50     U.S. private assets, net......................................................   -285,474 -102,801 -111,102   -8,010  -63,559 -308,013 -106,930 -133,788  -26,858
      51         Direct investment.........................................................   -173,799  -40,837  -34,049  -45,206  -53,705  -47,608  -55,257  -43,479   11,778
      52         Foreign securities........................................................    -72,337  -26,619    8,429  -28,312  -25,835  -16,524  -26,844  -15,015   11,829
      53         U.S. claims on unaffiliated foreigners reported by
                     U.S. nonbanking concerns..............................................    -28,932  -11,207  -22,480   35,845  -31,090  -56,761   12,122  -14,986  -27,108
      54         U.S. claims reported by U.S. banks, not included elsewhere................    -10,406  -24,138  -63,002   29,663   47,071 -187,120  -36,951  -60,308  -23,357

      55 Foreign-owned assets in the United States, net (increase/financial inflow (+))....    829,173  246,105  218,553  134,202  230,311  445,348  270,745  286,412   15,667

      56     Foreign official assets in the United States, net.............................    248,573   48,986   65,245   50,663   83,679  127,864   73,349   60,118  -13,231
      57         U.S. Government securities................................................    194,568   39,845   45,958   27,293   81,472  114,708   65,240   51,735  -13,505
      58             U.S. Treasury securities..............................................    169,685   30,277   42,668   23,953   72,787  101,692   62,979   45,688  -17,291
      59             Other.................................................................     24,883    9,568    3,290    3,340    8,685   13,016    2,261    6,047    3,786
      60         Other U.S. Government liabilities.........................................       -564     -437      -16      -41      -70     -140      -89      515      604
      61         U.S. liabilities reported by U.S. banks, not included elsewhere...........     49,420    8,325   18,552   22,019      524   11,854    6,189    4,750   -1,439
      62         Other foreign official assets.............................................      5,149    1,253      751    1,392    1,753    1,442    2,009    3,118    1,109

      63     Other foreign assets in the United States, net................................    580,600  197,119  153,308   83,539  146,632  317,484  197,396  226,294   28,898
      64         Direct investment.........................................................     39,890   32,523     -544   -2,810   10,719   10,225   32,568   53,070   20,502
      65         U.S. Treasury securities..................................................    113,432    8,974   53,254   46,490    4,714   65,438   29,684   14,072  -15,612
      66         U.S. securities other than U.S. Treasury securities.......................    250,981   56,723   92,407   18,090   83,761   62,064   88,843   90,489    1,646
      67         U.S. currency.............................................................     16,640    4,927    1,458    2,768    7,487   -1,800    8,754    2,560   -6,194
      68         U.S. liabilities to unaffiliated foreigners reported by
                     U.S. nonbanking concerns..............................................     84,014   69,410   -2,257   12,721    4,140   40,723   -3,603   19,542   23,145
      69         U.S. liabilities reported by U.S. banks, not included elsewhere...........     75,643   24,562    8,990    6,280   35,811  140,834   41,150   46,561    5,411

      70 Statistical discrepancy (sum of above items with sign reversed)...................    -12,012   -4,828   27,836    6,385  -41,404    8,941     -220   11,847   12,067

         Memoranda:
      71 Balance on goods (lines 3 and 20).................................................   -547,552 -137,943 -135,533 -134,635 -139,441 -150,768 -163,580 -166,731   -3,151
      72 Balance on services (lines 4 and 21)..............................................     51,044   12,557   12,153   12,385   13,947   12,166   12,496   11,389   -1,107
      73 Balance on goods and services (lines 2 and 19)....................................   -496,508 -125,386 -123,380 -122,250 -125,494 -138,602 -151,084 -155,342   -4,258
      74 Balance on income (lines 12 and 29)...............................................     33,279    3,995    5,874    7,261   16,151   12,164    5,037    5,281      244
      75 Unilateral current transfers, net (line 35).......................................    -67,439  -16,815  -16,369  -16,639  -17,617  -20,726  -18,344  -14,648    3,696
      76 Balance on current account (lines 1, 18, and 35 or lines 73, 74, and 75)..........   -530,668 -138,206 -133,875 -131,628 -126,960 -147,164 -164,391 -164,709     -318

      r Revised.  p Preliminary.

      NOTE:  Details may not add to totals because of rounding.     Source:  U. S. Bureau of Economic Analysis