Survey of Current Business
February 2019
Volume 99, Number 2

U.S. Net International Investment Position

Third Quarter 2018

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The U.S. net international investment position—the value of U.S. assets less the value of U.S. liabilities—decreased to −$9,627.2 billion (preliminary) at the end of the third quarter of 2018 from −$8,845.1 billion (revised) at the end of the second quarter (chart 1). The $782.1 billion decrease in the net investment position reflected net financial transactions of −$24.6 billion and net other changes in position, such as price and exchange-rate changes, of −$757.5 billion (table A).

The U.S. international investment position is a statistical balance sheet that presents the dollar value of U.S. external financial assets and liabilities at a specific point in time. The negative net investment position represents a U.S. net liability to the rest of the world.

Highlights

  • The net investment position decreased 8.8 percent in the third quarter, compared with a decrease of 14.2 percent in the second quarter and an average quarterly decrease of 4.4 percent from the first quarter of 2011 through the first quarter of 2018.
  • U.S. assets increased $135.5 billion to $27,150.7 billion, reflecting increases in portfolio investment assets and direct investment assets that were partly offset by decreases in financial derivatives, other investment assets, and reserve assets.
  • U.S. liabilities increased $917.6 billion to $36,777.9 billion, reflecting increases in all major categories of liabilities, except financial derivatives.

 

 

U.S. assets increased $135.5 billion to $27,150.7 billion at the end of the third quarter, reflecting increases in portfolio investment assets and direct investment assets that were partly offset by decreases in financial derivatives, other investment assets, and reserve assets (table B, chart 2).

  • Assets excluding financial derivatives increased $214.7 billion to $25,651.5 billion. The increase resulted from financial transactions of $141.9 billion and other changes in position of $72.8 billion.
    • Financial transactions mostly reflected net U.S. acquisition of direct investment assets and net U.S. purchases of foreign securities. The net U.S. acquisition of direct investment assets followed two quarters of net U.S. withdrawal of assets. For more information, see the box “Effects of the 2017 Tax Cuts and Jobs Act on U.S. Direct Investment Assets.”
    • Other changes in position reflected foreign stock price increases that raised the equity value of portfolio investment and direct investment assets. These price increases were partly offset by decreases from exchange-rate changes, as several major foreign currencies depreciated against the U.S. dollar, lowering the value of foreign-currency-denominated assets in dollar terms.
  • Financial derivatives decreased $79.3 billion to $1,499.2 billion, reflecting decreases in single-currency interest rate contracts and foreign exchange contracts.

 

U.S. liabilities increased $917.6 billion to $36,777.9 billion at the end of the third quarter, reflecting increases in all major categories of liabilities, except financial derivatives (table C, chart 3).

  • Liabilities excluding financial derivatives increased $991.4 billion to $35,335.9 billion. The increase resulted from financial transactions of $154.3 billion and other changes in position of $837.1 billion.
    • Financial transactions mostly reflected net U.S. incurrence of direct investment liabilities.
    • Other changes in position were driven by U.S. stock price increases that raised the equity value of direct investment and portfolio investment liabilities.
  • Financial derivatives decreased $73.9 billion to $1,442.0 billion, reflecting decreases in single-currency interest rate contracts and foreign exchange contracts.

The U.S. net international investment position statistics for the second quarter of 2018 have been updated to incorporate newly available and revised source data (table D).