News Release: U.S. International TransactionsNOTE: See the navigation bar at the right side of the news release text for links to data tables, contact personnel and their telephone numbers, and supplementary materials.
EMBARGOED UNTIL RELEASE AT 8:30 A.M. EDT, Tuesday, June 20, 2017
|Christopher Steiner:||(301) 278-9492||(Technical)||Christopher.Steiner@bea.gov|
|Connie O’Connell:||(301) 278-9003||(Media)||Connie.OConnell@bea.gov|
U.S. International Transactions: First Quarter 2017 and Annual Update
Current-Account Balance The U.S. current-account deficit increased to $116.8 billion (preliminary) in the first quarter of 2017 from $114.0 billion (revised) in the fourth quarter of 2016, according to statistics released by the Bureau of Economic Analysis (BEA). The deficit increased to 2.5 percent of current- dollar gross domestic product (GDP) from 2.4 percent in the fourth quarter. The $2.8 billion increase in the current-account deficit reflected a $5.3 billion increase in the deficit on goods and a $3.6 billion decrease in the surplus on primary income that were partly offset by a $5.8 billion decrease in the deficit on secondary income and a $0.3 billion increase in the surplus on services. The remainder of this release highlights changes in major aggregates of the U.S. international transactions accounts and selected component contributions to those changes from the fourth quarter of 2016 to the first quarter of 2017, and highlights updates to previously published statistics. Current-Account Transactions (tables 1-5) Exports of goods and services and income receipts Exports of goods and services and income receipts increased $22.5 billion in the first quarter to $830.3 billion. * Goods exports increased $13.2 billion to $383.7 billion, mostly reflecting increases in exports of industrial supplies and materials, largely petroleum and products, and in exports of automotive vehicles, parts, and engines. * Secondary income receipts increased $4.3 billion to $39.2 billion, largely reflecting an increase in U.S. government transfers, mostly fines and penalties. * Primary income receipts increased $3.5 billion to $216.5 billion, reflecting increases in other investment income and in direct investment income. Imports of goods and services and income payments Imports of goods and services and income payments increased $25.2 billion to $947.1 billion. * Goods imports increased $18.4 billion to $584.0 billion, mostly reflecting increases in industrial supplies and materials, mostly crude oil, in capital goods except automotive, and in automotive vehicles, parts, and engines. * Primary income payments increased $7.1 billion to $168.8 billion, mostly reflecting increases in direct investment income and in other investment income, primarily interest on loans and deposits. Financial Account (tables 1, 6, 7, and 8) Net U.S. borrowing measured by financial-account transactions was $191.4 billion in the first quarter of 2017, an increase from net borrowing of $74.8 billion in the fourth quarter of 2016. A shift to net U.S. incurrence of liabilities excluding financial derivatives from fourth-quarter net U.S. repayment was partly offset by a shift to net U.S. acquisition of financial assets excluding financial derivatives from net U.S. liquidation. Financial assets Transactions in financial assets excluding financial derivatives shifted to net U.S. acquisition of $282.7 billion in the first quarter from net U.S. liquidation of $84.5 billion in the fourth quarter. * Transactions in other investment assets shifted to net U.S. acquisition of $50.9 billion in the first quarter from net liquidation of $115.9 billion in the fourth quarter, mostly reflecting a shift to net U.S. placement of deposits abroad from fourth-quarter net U.S. withdrawal and a shift to net U.S. provision of loans to foreigners from net foreign repayment. * Transactions in portfolio investment assets shifted to net U.S. purchases of $120.3 billion in the first quarter from net sales of $13.4 billion in the fourth quarter, mostly reflecting a shift to net purchases from net sales of equity and investment fund shares. * Net U.S. acquisition of direct investment assets increased $68.4 billion to $111.7 billion in the first quarter, mostly reflecting a shift to net acquisition by U.S. parents of debt instrument claims on their foreign affiliates. Liabilities Transactions in liabilities excluding financial derivatives shifted to net U.S. incurrence of $471.1 billion in the first quarter from net U.S. repayment of $16.7 billion in the fourth quarter. * Transactions in other investment liabilities shifted to net U.S. incurrence of $149.6 billion in the first quarter from net U.S. repayment of $96.8 billion in the fourth quarter, mostly reflecting a shift to net incurrence of loan liabilities from fourth-quarter repayment. * Net U.S. incurrence of portfolio investment liabilities increased $169.0 billion to $231.5 billion, mostly reflecting a shift to net foreign purchases of equity and investment funds shares from net foreign sales in the fourth quarter. * Net U.S. incurrence of direct investment liabilities increased $72.5 billion to $90.1 billion, mostly reflecting a decrease in net repayment of U.S. parents’ debt instrument liabilities and an increase in net incurrence of equity liabilities. Financial derivatives Transactions in financial derivatives other than reserves reflected first-quarter net borrowing of $3.0 billion, a $4.0 billion decrease from the fourth quarter. Statistical Discrepancy (table 1) The statistical discrepancy shifted to -$74.7 billion in the first quarter of 2017 from $39.3 billion in the fourth quarter of 2016. Updates to Fourth Quarter 2016 International Transactions Accounts Aggregates Billions of dollars, seasonally adjusted Preliminary estimate Revised estimate Current-account balance -112.4 -114.0 Goods balance -196.1 -195.1 Services balance 63.8 61.0 Primary-income balance 61.5 51.3 Secondary-income balance -41.5 -31.3 Net lending (+)/borrowing (-) from financial-account transactions -92.0 -74.8 Statistical discrepancy 20.4 39.3 Annual Update of the International Transactions Accounts (table 9) The statistics in this release reflect the annual update of the U.S. international transactions accounts. With this update, BEA has incorporated a new data source, an improved estimation methodology, newly available and revised source data, and updated seasonal adjustments. Key changes to the statistics are summarized below and in table 9. * Revised statistics on secondary income reflect new data sources for estimating taxes withheld by the U.S. government and by foreign governments on exports and imports of services and receipts and payments of primary income beginning with statistics for 1999. For 1999 to 2005, revised statistics on direct investment interest income, a component of primary income, also reflect the new data source for taxes. These statistics are derived by adding an estimate of taxes to BEA’s survey data on direct investment interest income, which were reported net of taxes. The new tax estimates do not affect direct investment interest income beginning with statistics for 2006 because taxes are included indistinguishably in the survey data. * Revised statistics on direct investment income and direct investment financial transactions reflect a new method for estimating current-cost adjustments to direct investment income beginning with statistics for 1999. * Revised statistics on primary income and financial-account transactions reflect data reported on BEA’s annual direct investment surveys and Treasury International Capital (TIC) annual surveys. The annual surveys provide more comprehensive data than were available previously. The statistical periods affected by the incorporation of newly available and revised data from these and other key sources are identified in the following table. Newly Available and Revised Source Data: Key Providers and Years Affected BEA: * Quarterly international services surveys (2014–2016) * Quarterly direct investment surveys (2014–2016) * Annual direct investment surveys (2014–2016) U.S. Census Bureau: * Data on goods exports and imports (2014–2016) U.S. Customs and Border Protection: * Number of foreign residents traveling in the United States (2015-2016) * Number of U.S. citizens traveling abroad (2016) U.S. Department of the Treasury: * Aggregate Holdings of Long-Term Securities by U.S. and Foreign Residents (2014-2016) * Foreign-Residents' Holdings of U.S. Securities, including Selected Money Market Instruments (2015-2016) * U.S. Ownership of Foreign Securities, including Selected Money Market Instruments (2015-2016) * Reports by Financial Institutions of Liabilities to, and Claims on, Foreign Residents by U.S. Residents (2014-2016) * Reports of Liabilities to, and Claims on, Unaffiliated Foreign Residents by U.S. Resident Non-Financial Institutions (2014-2016) * Reports of Holdings of, and Transactions in, Financial Derivatives Contracts with Foreign Residents (2014-2016) A more detailed discussion of the new data sources for estimating withholding taxes and the new methodology for estimating current-cost adjustments appears in "Preview of the 2017 Annual Update of the International Economic Accounts," in the May issue of the Survey of Current Business. Additional information on the updates to the U.S. international transactions accounts and the U.S. international investment position accounts will be provided in the July issue of the Survey of Current Business. _______________________________________________________________________________________________ Additional Information Resources * Stay informed about BEA developments by reading the BEA blog, signing up for BEA’s email subscription service, or following BEA on Twitter @BEA_News. * 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 (API). * For more on BEA’s statistics, see our monthly online journal, the Survey of Current Business. * BEA's news release schedule. * More information on these international transactions statistics will be provided next month in the Survey of Current Business. * 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 U.S. government grants and 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 and certain disaster-related nonlife insurance claims. Nonproduced nonfinancial assets include natural resources and contracts, leases, and licenses. 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 on the management of an enterprise resident in another economy. Ownership or control of 10 percent or more of the nonresident entity’s voting securities 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 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 components are monetary gold, International Monetary Fund (IMF) special drawing rights (SDRs), 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. Quarterly statistics are open for revision for at least the prior three 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 three prior 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 that are 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 MNEs, detailed annual and quarterly statistics on direct investment, and annual statistics on new 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.