FOR WIRE TRANSMISSION: 10:00 A.M. EST, WEDNESDAY, DECEMBER 9, 1998
Harlan W. King: (202) 606-9571 BEA 98-37
Christopher L. Bach: 606-9545
Recorded Message: 606-5362
U.S. International Transactions: Third Quarter 1998
Current account
The U.S. current-account deficit -- the combined balances on trade in
goods and services, investment income, and net unilateral transfers --
increased to $61.3 billion in the third quarter from $56.7 billion
(revised) in the second, according to preliminary estimates of the
Commerce Department's Bureau of Economic Analysis. An increase in the
deficit on investment income, a decrease in the surplus on services,
and an increase in net unilateral transfers accounted for the
rise. The deficit on goods was virtually unchanged.
Goods and services
The deficit on goods and services increased to $45.8 billion in the third
quarter from $43.9 billion in the second.
Goods The deficit on goods was $64.4 billion in the third quarter,
virtually unchanged from the second.
Goods exports decreased to $163.6 billion from $164.8 billion. Both
agricultural and nonagricultural exports decreased.
Goods imports decreased to $227.9 billion from $229.3 billion. The
decrease was in petroleum imports; nonpetroleum imports were unchanged.
Services The surplus on services decreased to $18.6 billion in the
third quarter from $20.6 billion in the second.
Service receipts decreased to $63.8 billion from $65.8 billion.
Declines in travel, passenger fares, and royalties and license fees more
than accounted for the decrease.
Service payments were $45.2 billion, virtually unchanged. Decreases in
travel and passenger fares were offset by increases in "other" private
services and "other" transportation.
Investment income
The deficit on investment income increased to $5.5 billion in the third
quarter from $3.4 billion in the second.
Income receipts on U.S. assets abroad decreased to $60.4 billion from
$61.9 billion. Direct investment receipts accounted for most of the
decrease, but "other" private receipts and U.S. Government receipts
decreased, too.
Income payments on foreign assets in the United States increased to $65.9
billion from $65.3 billion. Increases in "other" private payments and in
direct investment payments were partly offset by a decrease in U.S.
Government payments.
Unilateral transfers
Net unilateral transfers were $10.1 billion in the third quarter, compared
with $9.4 billion in the second, mostly as a result of an increase in U.S.
Government grants.
Capital transactions
Net recorded capital inflows -- the difference between changes in U.S.
assets abroad and changes in foreign assets in the United States -- were
$64.8 billion in the third quarter, compared with $55.1 billion (revised)
in the second. Capital inflows for foreign assets in the United States
decelerated less than capital outflows for U.S. assets abroad.
U.S. assets abroad
U.S. assets abroad increased $48.1 billion in the third quarter, compared
with an increase of $109.8 billion in the second.
U.S. claims on foreigners reported by U.S. banks increased $28.3 billion
in the third quarter, following an increase of $24.6 billion in the second.
Although there was a step-up in lending to industrial countries to meet a
surge in demand for short-term credit during a period of unsettled
financial conditions, that step-up was partly offset by a decrease in
lending to international bond mutual funds in the Caribbean late in the
quarter.
Transactions in foreign securities shifted to net U.S. sales of $17.0
billion in the third quarter from net purchases of $27.9 billion in the
second. U.S. transactions in foreign bonds shifted to net sales of $8.7
billion from net purchases of $26.9 billion, and U.S. transactions in
foreign stocks shifted to net sales of $8.3 billion from net purchases of
$1.0 billion.
Net capital outflows for U.S. direct investment abroad were $21.2 billion
in the third quarter, compared with $40.6 billion in the second. Net
equity capital outflows dropped substantially, net intercompany debt
shifted to net inflows, and reinvested earnings decreased.
U.S. official reserve assets increased $2.0 billion in the third quarter,
following a $1.9 billion increase in the second.
Foreign assets in the United States
Foreign assets in the United States increased $112.9 billion in the third
quarter, compared with an increase of $164.9 billion in the second.
U.S. liabilities to foreigners reported by U.S. banks, excluding U.S.
Treasury securities, increased $82.7 billion in the third quarter,
following an increase of $37.7 billion in the second. U.S. banks received
a large amount of funds from foreigners as a result of uncertainty in
financial markets, as well as borrowed from abroad to finance their
overseas lending. In addition, banks reported an exceptional increase in
banks' custody liabilities, which represented inflows from overseas
placements of short-term paper by U.S. nonbanks.
Foreign private transactions in U.S. Treasury securities shifted to net
sales of $0.3 billion from net purchases of $26.9 billion, mostly as a
result of a large shift to net sales in the Caribbean.
Net foreign purchases of U.S. securities other than U.S. Treasury
securities were $22.9 billion in the third quarter, down from $71.0 billion
in the second. Net foreign purchases of U.S. bonds were $28.3 billion,
one-half the second quarter record of $56.9 billion, and foreign
transactions in U.S. stocks shifted to net sales of $5.4 billion from net
purchases of $14.1 billion.
Net capital inflows for foreign direct investment in the United States were
$27.1 billion in the third quarter, compared with $19.1 billion in the
second. The step-up was more than accounted for by a doubling of net
equity inflows and a small increase in reinvested earnings, and was partly
offset by a decrease in net intercompany debt inflows.
Net U.S. currency shipments were $7.3 billion in the third quarter,
compared with $2.3 billion in the second.
Foreign official assets in the United States decreased $46.4 billion in the
third quarter, following a $10.3 billion decrease in the second. Most of
the decrease in the third quarter was concentrated in a few non-industrial
countries, augmented by declines in many industrial countries.
The statistical discrepancy -- errors and omissions in recorded
transactions -- was a negative $3.5 billion in the third quarter, compared
with a positive $1.6 billion in the second.
In the third quarter, the value of the U.S. dollar was unchanged on a
trade-weighted quarterly average basis against the currencies of 10
industrial countries.
Revisions
The second-quarter current-account balance and its components were revised
from previously published estimates. The current-account deficit for the
second quarter was revised to $56.7 billion from $56.5 billion. The goods
deficit was revised to $64.4 billion from $64.8 billion; the services
surplus was revised to $20.6 billion from $20.9 billion; the deficit on
investment income was revised to $3.4 billion from $3.2 billion; and net
unilateral transfers were revised to $9.4 billion from $9.3 billion.
* * *
Release dates for 1999:
Fourth quarter and 1998 ...............................................March 11 (Thursday)
First quarter 1999 ............................................................June 17 (Thursday)
Second quarter 1999 ................................................September 14 (Tuesday)
Third quarter 1999 ...................................................December 14 (Tuesday)
* * *
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Survey of Current Business; and BEA news releases are available on BEA's
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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
606-5306 Gross domestic product
606-5303 Personal income and outlays
Most of BEA's estimates and analyses appear in the Survey of Current
Business, BEA's monthly journal. The printed Survey of Current Business is
available from the Superintendent of Documents, U.S. Government Printing
Office, Washington D.C. 20402. First class mail: Annual subscription
$88.00 domestic. Second class mail: Annual subscription $39.00 domestic,
$48.75 foreign; single issue $14.00 domestic, $17.50 foreign.
U.S. International Transactions December 9, 1998
[Millions of dollars, quarters seasonally adjusted]
1997 1998 Change:
(Credits +, debits -) 1997 1998
I II III IV I IIr IIIp II-III
1 Exports of goods, services, and income ................................................. 1,179,380 283,765 295,287 300,481 299,843 299,061 292,483 287,751 -4,732
2 Goods, adjusted, excluding military 1/................................................ 679,325 163,499 169,240 172,302 174,284 171,469 164,821 163,560 -1,261
3 Services 2/........................................................................... 258,268 62,685 64,776 65,628 65,175 65,070 65,762 63,757 -2,005
4 Transfers under U.S. military agency sales contracts ............................... 18,269 4,338 4,890 4,883 4,158 4,672 4,088 4,151 63
5 Travel.............................................................................. 73,268 18,197 18,542 18,325 18,204 17,967 18,141 16,728 -1,413
6 Passenger fares..................................................................... 20,895 5,130 5,189 5,212 5,364 5,198 5,223 4,672 -551
7 Other transportation................................................................ 26,911 6,698 6,724 6,678 6,809 6,460 6,292 6,404 112
8 Royalties and license fees ......................................................... 33,676 8,306 8,407 8,580 8,381 8,675 8,908 8,543 -365
9 Other private services ............................................................. 84,465 19,813 20,833 21,750 22,069 21,903 22,913 23,062 149
10 U.S. Government miscellaneous services............................................... 784 203 191 200 190 195 197 197 ....
11 Income receipts on U.S. assets abroad................................................. 241,787 57,581 61,271 62,551 60,384 62,522 61,900 60,434 -1,466
12 Direct investment receipts.......................................................... 109,407 26,716 28,286 28,935 25,470 26,391 25,848 24,738 -1,110
13 Other private receipts.............................................................. 128,845 30,018 32,041 32,717 34,069 35,302 35,105 34,810 -295
14 U.S. Government receipts............................................................ 3,535 847 944 899 845 829 947 886 -61
15 Imports of goods, services, and income.................................................. -1,294,904 -311,881 -321,342 -329,130 -332,549 -336,316 -339,731 -338,966 765
16 Goods, adjusted, excluding military 1/................................................ -877,279 -213,222 -218,336 -221,598 -224,123 -227,167 -229,264 -227,920 1,344
17 Services 2/........................................................................... -170,520 -41,092 -42,195 -43,437 -43,795 -44,379 -45,190 -45,152 38
18 Direct defense expenditures......................................................... -11,488 -2,796 -2,699 -2,938 -3,055 -3,145 -3,045 -3,050 -5
19 Travel.............................................................................. -51,220 -12,736 -12,764 -12,897 -12,823 -13,309 -13,465 -13,008 457
20 Passenger fares..................................................................... -18,235 -4,311 -4,663 -4,704 -4,557 -4,650 -4,757 -4,568 189
21 Other transportation................................................................ -28,949 -7,034 -7,317 -7,200 -7,397 -7,250 -7,430 -7,623 -193
22 Royalties and license fees ......................................................... -9,411 -2,106 -2,168 -2,559 -2,578 -2,850 -2,759 -2,670 89
23 Other private services ............................................................. -48,421 -11,423 -11,905 -12,409 -12,684 -12,471 -13,028 -13,523 -495
24 U.S. Government miscellaneous services.............................................. -2,796 -686 -679 -730 -701 -704 -706 -710 -4
25 Income payments on foreign assets in the United States................................ -247,105 -57,567 -60,811 -64,095 -64,631 -64,770 -65,277 -65,894 -617
26 Direct investment payments.......................................................... -45,674 -10,664 -10,887 -12,548 -11,574 -10,802 -10,673 -11,051 -378
27 Other private payments.............................................................. -113,959 -26,705 -28,023 -28,849 -30,382 -31,285 -31,644 -32,066 -422
28 U.S. Government payments............................................................ -87,472 -20,198 -21,901 -22,698 -22,675 -22,683 -22,960 -22,777 183
29 Unilateral transfers, net............................................................... -39,691 -8,874 -9,035 -9,445 -12,337 -9,480 -9,442 -10,084 -642
30 U.S. Government grants ............................................................... -12,090 -2,241 -2,274 -2,362 -5,213 -2,266 -2,063 -2,582 -519
31 U.S. Government pensions and other transfers.......................................... -4,193 -1,013 -1,055 -1,056 -1,069 -1,126 -1,126 -1,132 -6
32 Private remittances and other transfers .............................................. -23,408 -5,620 -5,706 -6,027 -6,055 -6,088 -6,253 -6,370 -117
U.S. International Transactions (Continued) December 9, 1998
[Millions of dollars, quarters seasonally adjusted]
1997 1998 Change:
(Credits +, debits -) 1997 1998
I II III IV I IIr IIIp II-III
33 U.S. assets abroad, net (increase/capital outflow (-)).................................... -478,502 -145,139 -86,606 -123,317 -123,441 -45,648 -109,787 -48,052 61,735
34 U.S. official reserve assets, net ...................................................... -1,010 4,480 -236 -730 -4,524 -444 -1,945 -2,026 -81
35 Gold.................................................................................. .... .... .... .... .... .... .... .... ....
36 Special drawing rights................................................................ -350 72 -133 -139 -150 -182 72 188 116
37 Reserve position in the International Monetary Fund................................... -3,575 1,055 54 -463 -4,221 -85 -1,031 -2,078 -1,047
38 Foreign currencies.................................................................... 2,915 3,353 -157 -128 -153 -177 -986 -136 850
39 U.S. Government assets, other than official reserve assets, net......................... 174 -22 -269 436 29 -388 -433 194 627
40 U.S. credits and other long-term assets............................................... -5,302 -1,168 -1,616 -1,421 -1,097 -1,189 -1,159 -1,266 -107
41 Repayments on U.S. credits and other long-term assets ................................ 5,504 1,171 1,358 1,878 1,097 1,177 722 1,344 622
42 U.S. foreign currency holdings and U.S. short-term assets, net.................. -28 -25 -11 -21 29 -376 4 116 112
43 U.S. private assets, net................................................................ -477,666 -149,597 -86,101 -123,023 -118,946 -44,816 -107,409 -46,220 61,189
44 Direct investment..................................................................... -121,843 -32,498 -26,388 -27,488 -35,470 -34,321 -40,589 -21,243 19,346
45 Foreign securities.................................................................... -87,981 -15,521 -23,263 -41,167 -8,030 -6,973 -27,878 16,970 44,848
46 U.S. claims on unaffiliated foreigners reported by
U.S. nonbanking concerns........................................................ -120,403 -37,880 -9,825 -24,791 -47,907 -6,596 -14,327 -13,612 715
47 U.S. claims reported by U.S. banks, not included elsewhere............................ -147,439 -63,698 -26,625 -29,577 -27,539 3,074 -24,615 -28,335 -3,720
48 Foreign assets in the United States, net (increase/capital inflow(+))............. 733,441 181,735 149,773 181,438 220,491 95,529 164,859 112,862 -51,997
49 Foreign official assets in the United States, net....................................... 15,817 26,949 -5,411 21,258 -26,979 11,324 -10,274 -46,370 -36,096
50 U.S. Government securities............................................................ -2,936 23,065 -10,862 9,353 -24,492 13,946 -20,064 -30,905 -10,841
51 U.S. Treasury securities ........................................................... -7,270 22,311 -11,689 6,686 -24,578 11,336 -20,318 -32,811 -12,493
52 Other............................................................................... 4,334 754 827 2,667 86 2,610 254 1,906 1,652
53 Other U.S. Government liabilities .................................................... -2,521 -587 -523 -1,167 -244 -1,059 -422 -414 8
54 U.S. liabilities reported by U.S. banks, not included elsewhere....................... 21,928 7,696 5,043 12,439 -3,250 -607 9,380 -12,607 -21,987
55 Other foreign official assets ........................................................ -654 -3,225 931 633 1,007 -956 832 -2,444 -3,276
56 Other foreign assets in the United States, net.......................................... 717,624 154,786 155,184 160,180 247,470 84,205 175,133 159,232 -15,901
57 Direct investment..................................................................... 93,449 25,879 20,149 18,964 28,453 25,931 19,141 27,065 7,924
58 U.S. Treasury securities.............................................................. 146,710 33,363 42,614 35,432 35,301 -1,701 26,916 -257 -27,173
59 U.S. currency......................................................................... 24,782 3,484 4,822 6,576 9,900 746 2,349 7,277 4,928
60 U.S. securities other than U.S. Treasury securities................................... 196,845 45,477 54,258 60,327 36,783 77,019 71,017 22,938 -48,079
61 U.S. liabilities to unaffiliated foreigners reported by U.S.
nonbanking concerns............................................................. 107,779 28,840 5,274 26,275 47,390 32,707 18,040 19,529 1,489
62 U.S. liabilities reported by U.S. banks, not included elsewhere....................... 148,059 17,743 28,067 12,606 89,643 -50,497 37,670 82,680 45,010
63 Allocations of special drawing rights..................................................... .... .... .... .... .... .... .... .... ....
64 Statistical discrepancy (sum of above items with sign reversed)........................... -99,724 394 -28,077 -20,027 -52,007 -3,146 1,618 -3,511 -5,129
Of which seasonal adjustment discrepancy................................................ .... 5,812 685 -10,018 3,528 6,217 1,474 -10,760 -12,234
Memoranda:
65 Balance on goods (lines 2 and 16)......................................................... -197,954 -49,723 -49,096 -49,296 -49,839 -55,698 -64,443 -64,360 83
66 Balance on services (lines 3 and 17)...................................................... 87,748 21,593 22,581 22,191 21,380 20,691 20,572 18,605 -1,967
67 Balance on goods and services (lines 65 and 66)..................................... -110,206 -28,130 -26,515 -27,105 -28,459 -35,007 -43,871 -45,755 -1,884
68 Balance on investment income (lines 11 and 25)............................................ -5,318 14 460 -1,544 -4,247 -2,248 -3,377 -5,460 -2,083
69 Balance on goods, services, and income (lines 1 and 15 or lines 67
and 68) ................................................................................ -115,524 -28,116 -26,055 -28,649 -32,706 -37,255 -47,248 -51,215 -3,967
70 Unilateral transfers, net (line 29)....................................................... -39,691 -8,874 -9,035 -9,445 -12,337 -9,480 -9,442 -10,084 -642
71 Balance on current account (lines 1, 15, and 29 or lines 69 and 70) ...................... -155,215 -36,990 -35,090 -38,094 -45,043 -46,735 -56,690 -61,299 -4,609
r Revised. p Preliminary.
1. Adjusted for timing, valuation, and coverage to balance of payments basis; excludes exports under U. S. military agency sales
contracts and imports of U. S. military agencies.
2. Includes some goods that cannot be separately identified from services.
NOTE:--Details may not add to totals because of rounding. Source: U. S. Department of Commerce, Bureau of Economic Analysis