Survey of Current Business
April 2019
Volume 99, Number 4

U.S. Net International Investment Position

Fourth Quarter and Year 2018

PDF

The U.S. net international investment position—the value of U.S. assets less the value of U.S. liabilities—decreased to −$9,717.1 billion (preliminary) at the end of the fourth quarter of 2018 from −$9,634.8 billion (revised) at the end of the third quarter (chart 1).

For the year 2018, the U.S. net international investment position decreased $1,992.1 billion from −$7,725.0 billion at the end of 2017 (chart 1).

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.

Fourth-quarter highlights

  • The net investment position decreased $82.4 billion in the fourth quarter, reflecting a $1,695.4 billion decrease in U.S. assets and a $1,613.0 billion decrease in U.S. liabilities. The decrease also reflected net financial transactions of −$199.2 billion and net other changes in position, such as price and exchange-rate changes, of $116.8 billion (table A).
  • The net investment position decreased 0.9 percent in the fourth quarter, compared with a decrease of 8.9 percent in the third quarter and an average quarterly decrease of 4.7 percent from the first quarter of 2011 through the second quarter of 2018.

Year 2018 highlights

  • The net investment position decreased $1,992.1 billion in 2018, reflecting a $2,400.5 billion decrease in U.S. assets and a $408.4 billion decrease in U.S. liabilities. The decrease also reflected net financial transactions of −$519.6 billion and net other changes in position, such as price and exchange-rate changes, of −$1,472.6 billion (table E).
  • The net investment position decreased 25.8 percent in 2018, compared with an increase of 5.6 percent in 2017.

 

 

U.S. assets decreased $1,695.4 billion to $25,398.6 billion at the end of the fourth quarter, reflecting decreases in portfolio investment and direct investment assets that were partly offset by increases in financial derivatives, other investment, and reserve assets (chart 2, table B).

  • Assets excluding financial derivatives decreased $1,942.1 billion to $23,652.6 billion. The decrease resulted from financial transactions of $136.5 billion and other changes in position of −$2,078.6 billion.
    • Financial transactions reflected net U.S. acquisition of other investment deposit and loan assets and of direct investment equity assets that were partly offset by net U.S. sales of foreign securities.
    • Other changes in position were driven by foreign stock price decreases that lowered the equity value of portfolio investment and direct investment assets.
  • Financial derivatives increased $246.7 billion to $1,746.0 billion, reflecting increases in single-currency interest rate contracts.

U.S. liabilities decreased $1,613.0 billion to $35,115.7 billion at the end of the fourth quarter, reflecting decreases in portfolio investment and direct investment liabilities that were partly offset by increases in other investment liabilities and financial derivatives (chart 3, table C).

  • Liabilities excluding financial derivatives decreased $1,886.2 billion to $33,400.5 billion. The decrease resulted from financial transactions of $315.6 billion and other changes in position of −$2,201.8 billion.
    • Financial transactions reflected net U.S. incurrence of other investment loan and deposit liabilities and of direct investment equity liabilities that were partly offset by net foreign sales of U.S. securities, especially of U.S. long-term debt.
    • Other changes in position were driven by U.S. stock price decreases that lowered the equity value of portfolio investment and direct investment liabilities.
  • Financial derivatives increased $273.1 billion to $1,715.2 billion, reflecting increases in single-currency interest rate contracts.

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

 

 

The U.S. net international investment position decreased to −$9,717.1 billion (preliminary) at the end of 2018 from −$7,725.0 billion at the end of 2017 (table E). The $1,992.1 billion decrease reflected a $2,400.5 billion decrease in U.S. assets and a $408.4 billion decrease in U.S. liabilities.

U.S. assets decreased $2,400.5 billion to $25,398.6 billion at the end of 2018, reflecting decreases in direct investment and portfolio investment assets that were partly offset by increases in financial derivatives and other investment assets (table E).

  • Assets excluding financial derivatives decreased $2,524.0 billion to $23,652.6 billion. The decrease resulted from financial transactions of $301.6 billion and other changes in position of −$2,825.6 billion.
    • Financial transactions reflected net U.S. purchases of foreign securities and net U.S. acquisition of other investment deposit assets that were partly offset by net U.S. withdrawal of direct investment equity assets. The net withdrawal of direct investment equity assets reflected U.S. parent repatriation of previously reinvested earnings in response to the Tax Cuts and Jobs Act. 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 mostly reflected foreign stock price decreases that lowered the equity value of portfolio investment and direct investment assets, and to a lesser extent, the depreciation of major foreign currencies against the U.S. dollar that lowered the value of foreign-currency-denominated assets in dollar terms.
  • Financial derivatives increased $123.5 billion to $1,746.0 billion, mostly in single-currency interest rate contracts and foreign exchange contracts.

 

U.S. liabilities decreased $408.4 billion to $35,115.7 billion at the end of 2018, reflecting decreases in portfolio investment and direct investment liabilities that were partly offset by increases in other investment liabilities and financial derivatives (table F).

  • Liabilities excluding financial derivatives decreased $529.3 billion to $33,400.5 billion. The decrease resulted from financial transactions of $800.9 billion and other changes in position of −$1,330.2 billion.
    • Financial transactions reflected net incurrence of liabilities in all major investment categories.
    • Other changes in position mostly reflected U.S. stock price decreases that lowered the equity value of portfolio investment and direct investment liabilities.
  • Financial derivatives increased $120.9 billion to $1,715.2 billion, mostly in single-currency interest rate contracts and foreign exchange contracts.