U.S. International Transactions

First Quarter 2019

By Nathan Hansen  |  Volume 99, Number 7  |  July 17, 2019

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The U.S. current-account deficit—a net measure of transactions between the United States and the rest of the world in goods, services, primary income, and secondary income—decreased to $130.4 billion (preliminary) in the first quarter of 2019 from $143.9 billion (revised) in the fourth quarter of 2018 (chart 1 and table A). The deficit was 2.5 percent of current-dollar gross domestic product in the first quarter, down from 2.8 percent in the fourth quarter.

The $13.5 billion decrease in the current-account deficit mostly reflected a decrease in the deficit on goods that was partly offset by an increase in the deficit on secondary income.

Chart 1. U.S. Current-Account Balance and Its Components, Line Chart.

[Click chart to expand]

Net U.S. borrowing measured by financial-account transactions was $37.8 billion in the first quarter, a decrease from net borrowing of $161.6 billion in the fourth quarter.

Table A. U.S. International Transactions
[Millions of dollars, seasonally adjusted]
  2018 2019 Change 2018:IV to 2019:I
IIr IIIr IVr Ip
Current account          
Exports of goods and services and income receipts (credits) 942,932 938,438 938,689 945,865 7,176
Exports of goods and services 633,191 626,239 623,761 628,445 4,684
Goods 427,088 419,545 416,964 419,347 2,383
Services 206,103 206,694 206,797 209,098 2,301
Primary income receipts 272,285 273,570 276,483 281,792 5,309
Secondary income (current transfer) receipts 37,456 38,629 38,445 35,629 −2,816
Imports of goods and services and income payments (debits) 1,050,243 1,064,177 1,082,616 1,076,268 −6,348
Imports of goods and services 773,192 789,663 794,907 783,054 −11,853
Goods 633,485 647,447 649,288 635,872 −13,416
Services 139,707 142,216 145,620 147,182 1,562
Primary income payments 209,456 208,846 216,424 220,680 4,256
Secondary income (current transfer) payments 67,595 65,669 71,285 72,533 1,248
Capital account          
Capital transfer receipts and other credits 0 524 2,723 0 −2,723
Capital transfer payments and other debits 5 3 2 n.a. n.a.
Financial account          
Net U.S. acquisition of financial assets excluding financial derivatives (net increase in assets / financial outflow (+)) −243,468 81,893 147,259 151,569 4,310
Direct investment assets −110,279 52,845 25,696 59,529 33,833
Portfolio investment assets −17,660 83,415 −22,210 −59,743 −37,533
Other investment assets −118,596 −54,189 141,668 151,574 9,906
Reserve assets 3,068 −177 2,105 208 −1,897
Net U.S. incurrence of liabilities excluding financial derivatives (net increase in liabilities / financial inflow (+)) −126,092 127,770 286,247 167,902 −118,345
Direct investment liabilities 16,603 126,925 52,720 105,453 52,733
Portfolio investment liabilities −12,609 12,274 14,884 −7,740 −22,624
Other investment liabilities −130,087 −11,430 218,644 70,189 −148,455
Financial derivatives other than reserves, net transactions −15,723 −11,505 −22,632 −21,421 1,211
Statistical discrepancy          
Statistical discrepancy1 −25,783 67,837 −20,414 92,648 113,062
Balances          
Balance on current account −107,311 −125,739 −143,927 −130,403 13,524
Balance on goods and services −140,001 −163,424 −171,146 −154,609 16,537
Balance on goods −206,396 −227,902 −232,323 −216,525 15,798
Balance on services 66,396 64,478 61,177 61,916 739
Balance on primary income 62,829 64,724 60,059 61,111 1,052
Balance on secondary income −30,139 −27,039 −32,841 −36,905 −4,064
Balance on capital account −5 521 2,721 0 −2,721
Net lending (+) or net borrowing (-) from current- and capital-account transactions2 −107,316 −125,218 −141,206 −130,403 10,803
Net lending (+) or net borrowing (-) from financial-account transactions3 −133,098 −57,381 −161,621 −37,754 123,867
p
Preliminary
r
Revised
n.a.
Not available
  1. The statistical discrepancy is the difference between net acquisition of financial 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.
  2. Sum of current- and capital-account balances.
  3. Sum of net U.S. acquisition of financial assets and net transactions in financial derivatives less net U.S. incurrence of liabilities.

Note. The statistics are presented in table 1.2 on BEA’s website.

Current-account highlights

  • The deficit on goods decreased $15.8 billion to $216.5 billion.
  • The surplus on services increased $0.7 billion to $62.0 billion.
  • The surplus on primary income increased $1.1 billion to $61.1 billion.
  • The deficit on secondary income increased $4.1 billion to $36.9 billion.

Capital-account highlights

There were no capital-account transactions recorded in the first quarter, following receipts of $2.7 billion in the fourth quarter. The fourth-quarter transactions reflected receipts from foreign insurance companies for losses resulting from the wildfires in California. For information on transactions associated with natural disasters, see “What are the effects of hurricanes and other disasters on the international economic accounts?”

Financial-account highlights

  • Net U.S. acquisition of financial assets excluding financial derivatives increased $4.3 billion in the first quarter to $151.6 billion (chart 2).
  • Net U.S. incurrence of liabilities excluding financial derivatives decreased $118.3 billion in the first quarter to $167.9 billion.
  • Transactions in financial derivatives other than reserves reflected first-quarter net borrowing of $21.4 billion.
Chart 2. Acquisition and Financial Assets and Incurrence of Liabilities Excluding Financial Derivatives, Line Chart

[Click chart to expand]

Statistical discrepancy

The statistical discrepancy was $92.6 billion in the first quarter following a statistical discrepancy of −$20.4 billion in the fourth quarter.

Exports of goods and services and income receipts increased $7.2 billion, or 0.8 percent, in the first quarter to $945.9 billion (charts 3 and 4 and table B).

  • Primary income receipts increased $5.3 billion, or 1.9 percent, to $281.8 billion, primarily reflecting increases in direct investment income and in other investment income. A decrease in portfolio investment income partly offset the increases. For more information on direct investment income, see “Effects of the 2017 Tax Cuts and Jobs Act on Components of the International Transactions Accounts.”
  • Goods exports increased $2.4 billion, or 0.6 percent, to $419.3 billion, primarily reflecting increases in automotive vehicles, parts, and engines, mostly passenger cars, and in foods, feeds, and beverages, mainly soybeans. A decrease in industrial supplies and materials partly offset the increases.
  • Services exports increased $2.3 billion, or 1.1 percent, to $209.1 billion, primarily reflecting an increase in travel (for all purposes including education), mostly personal travel.
  • Secondary income receipts decreased $2.8 billion, or 7.3 percent, to $35.6 billion, reflecting decreases in both private and U.S. government transfers.
Chart 3. Current-Account Transactions, Line Chart.

[Click chart to expand]

Chart 4. Percent Change in Exports of Goods and Services and Income Receipts, Bar Chart.

[Click chart to expand]

Table B. Exports of Goods and Services and Income Receipts
[Millions of dollars, seasonally adjusted]
  2018 2019 Change 2018:IV to 2019:I
IIr IIIr IVr Ip
Exports of goods and services and income receipts 942,932 938,438 938,689 945,865 7,176
Exports of goods 427,088 419,545 416,964 419,347 2,383
General merchandise 421,770 413,442 412,683 414,659 1,976
Foods, feeds, and beverages 37,273 33,829 29,988 32,737 2,749
Industrial supplies and materials 136,177 135,990 136,077 130,938 −5,139
Energy products 55,813 56,374 57,659 53,694 −3,965
Of which: Petroleum and products 48,817 49,597 50,018 46,276 −3,742
Nonenergy products 80,364 79,616 78,418 77,244 −1,174
Capital goods except automotive 141,615 140,316 142,219 142,068 −151
Automotive vehicles, parts, and engines 40,392 38,864 37,827 41,274 3,447
Consumer goods except food and automotive 51,264 51,121 51,917 52,963 1,046
Other general merchandise 15,049 13,323 14,655 14,678 23
Net exports of goods under merchanting 69 68 68 62 −6
Nonmonetary gold 5,249 6,034 4,214 4,625 411
           
Exports of services1 206,103 206,694 206,797 209,098 2,301
Maintenance and repair services n.i.e. 7,581 7,856 8,225 8,471 246
Transport 23,604 23,098 22,882 23,098 216
Travel (for all purposes including education) 53,964 53,013 53,297 54,678 1,381
Business 9,725 9,559 9,504 9,717 213
Personal 44,239 43,455 43,793 44,961 1,168
Insurance services 4,238 4,506 4,417 4,331 −86
Financial services 28,298 28,003 27,854 28,208 354
Charges for the use of intellectual property n.i.e. 32,017 31,879 31,467 31,238 −229
Telecommunications, computer, and information services 10,505 10,760 11,230 11,299 69
Other business services 40,360 42,319 42,074 42,428 354
Government goods and services n.i.e. 5,536 5,259 5,350 5,347 −3
           
Primary income receipts 272,285 273,570 276,483 281,792 5,309
Investment income 270,623 271,881 274,786 280,085 5,299
Direct investment income 146,237 145,910 141,248 147,455 6,207
Portfolio investment income 101,758 102,991 107,568 104,204 −3,364
Income on equity and investment fund shares 67,303 68,031 71,983 68,931 −3,052
Interest on debt securities 34,455 34,961 35,586 35,274 −312
Other investment income 22,580 22,750 25,783 28,194 2,411
Reserve asset income 47 230 187 231 44
Compensation of employees 1,663 1,689 1,697 1,707 10
Secondary income (current transfer) receipts2 37,456 38,629 38,445 35,629 −2,816
p
Preliminary
r
Revised
n.i.e.
Not included elsewhere
  1. See also Shari A. Allen, Alexis N. Grimm, and Christopher P. Steiner, “U.S. International Services: Trade in Services in 2017 and Services Supplied Through Affiliates in 2016,” Survey of Current Business 98 (October 2018).
  2. Secondary income receipts include U.S. government and private transfers, such as fines and penalties, withholding taxes, insurance-related transfers, and other current transfers.

Note. The statistics are presented in table 1.2, table 2.1, table 3.1, table 4.1, and table 5.1 on BEA’s website.

Imports of goods and services and income payments decreased $6.3 billion, or 0.6 percent, in the first quarter to $1.08 trillion (charts 3 and 5 and table C).

  • Goods imports decreased $13.4 billion, or 2.1 percent, to $635.9 billion, primarily reflecting a decrease in industrial supplies and materials, mainly petroleum and products.
  • Primary income payments increased $4.3 billion, or 2.0 percent, to $220.7 billion, primarily reflecting an increase in direct investment income.
Chart 5. Percent Change in Imports of Goods and Services and Income Payments, Bar Chart.

[Click chart to expand]

Table C. Imports of Goods and Services and Income Payments
[Millions of dollars, seasonally adjusted]
  2018 2019 Change 2018:IV to 2019:I
IIr IIIr IVr Ip
Imports of goods and services and income payments 1,050,243 1,064,177 1,082,616 1,076,268 −6,348
Imports of goods 633,485 647,447 649,288 635,872 −13,416
General merchandise 630,806 644,988 646,669 633,961 −12,708
Foods, feeds, and beverages 37,088 37,105 37,358 37,488 130
Industrial supplies and materials 146,247 149,999 144,308 134,320 −9,988
Energy products 64,469 67,746 60,804 54,796 −6,008
Of which: Petroleum and products 61,074 64,211 56,190 50,470 −5,720
Nonenergy products 81,778 82,253 83,504 79,524 −3,980
Capital goods except automotive 174,076 176,328 175,102 172,303 −2,799
Automotive vehicles, parts, and engines 90,780 93,978 96,013 95,529 −484
Consumer goods except food and automotive 157,833 161,564 166,557 167,657 1,100
Other general merchandise 24,783 26,014 27,331 26,663 −668
Nonmonetary gold 2,679 2,458 2,619 1,911 −708
           
Imports of services1 139,707 142,216 145,620 147,182 1,562
Maintenance and repair services n.i.e. 2,075 2,286 2,287 2,303 16
Transport 26,750 27,226 28,119 27,836 −283
Travel (for all purposes including education) 35,426 36,148 37,364 38,020 656
Business 4,126 4,144 4,082 4,077 −5
Personal 31,300 32,005 33,282 33,943 661
Insurance services 10,478 10,433 11,369 11,915 546
Financial services 7,872 7,776 7,932 8,058 126
Charges for the use of intellectual property n.i.e. 13,702 13,771 14,445 14,491 46
Telecommunications, computer, and information services 10,026 10,342 10,690 10,879 189
Other business services 27,643 28,426 27,635 27,800 165
Government goods and services n.i.e. 5,734 5,808 5,779 5,882 103
           
Primary income payments 209,456 208,846 216,424 220,680 4,256
Investment income 204,614 203,887 211,467 215,696 4,229
Direct investment income 64,252 61,217 62,648 65,885 3,237
Portfolio investment income 118,189 117,851 119,879 118,991 −888
Income on equity and investment fund shares 40,112 39,186 40,874 40,296 −578
Interest on debt securities 78,078 78,665 79,004 78,696 −308
Other investment income 22,173 24,820 28,941 30,820 1,879
Compensation of employees 4,843 4,958 4,956 4,984 28
Secondary income (current transfer) payments2 67,595 65,669 71,285 72,533 1,248
p
Preliminary
r
Revised
n.i.e.
Not included elsewhere
  1. See also Shari A. Allen, Alexis N. Grimm, and Christopher P. Steiner, “U.S. International Services: Trade in Services in 2017 and Services Supplied Through Affiliates in 2016,” Survey of Current Business 98 (October 2018).
  2. Secondary income 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.

Note. The statistics are presented in table 1.2, table 2.1, table 3.1, table 4.1, and table 5.1 on BEA’s website.

Acquisition of financial assets

  • Net U.S. acquisition of direct investment assets increased $33.8 billion to $59.5 billion (chart 6 and table D). For more information on recent transactions in direct investment assets, see “Effects of the 2017 Tax Cuts and Jobs Act on Components of the International Transactions Accounts.”
  • Net U.S. acquisition of other investment assets increased $9.9 billion to $151.6 billion, reflecting an increase in net U.S. provision of loans to foreign residents that was mostly offset by a decrease in net U.S. acquisition of currency and deposits.
  • Net U.S. sales of portfolio investment assets increased $37.5 billion to $59.7 billion, reflecting net U.S. sales of foreign stocks following net U.S. purchases in the fourth quarter.

Incurrence of liabilities

  • Net U.S. incurrence of other investment liabilities decreased $148.5 billion to $70.2 billion, mostly reflecting net foreign withdrawal of deposits in the United States following a net increase in deposits in the fourth quarter.
  • Net foreign sales of U.S. portfolio investment liabilities were $7.7 billion following net foreign purchases of $14.9 billion in the fourth quarter, reflecting relatively large and nearly offsetting changes in U.S. stock and debt security transactions from the fourth to the first quarter.
  • Net U.S. incurrence of direct investment liabilities increased $52.7 billion to $105.5 billion, primarily reflecting net U.S. incurrence of debt liabilities following net U.S. repayment in the fourth quarter.
Chart 6. Transactions in Financial Assets and Liabilities Excluding Financial Derivatives, Bar Chart.

[Click chart to expand]

Table D. Net U.S. Acquisition of Financial Assets and Net U.S. Incurrence of Liabilities
[Millions of dollars, seasonally adjusted]
  2018 2019 Change 2018:IV to 2019:I
IIr IIIr IVr Ip
Net U.S. acquisition of financial assets excluding financial derivatives (net increase in assets / financial outflow (+)) −243,468 81,893 147,259 151,569 4,310
Direct investment assets −110,279 52,845 25,696 59,529 33,833
Equity −85,734 56,999 19,875 49,685 29,810
Equity other than reinvestment of earnings −1,379 38,068 32,514 9,480 −23,034
Reinvestment of earnings −84,355 18,931 −12,639 40,204 52,843
Debt instruments −24,546 −4,154 5,821 9,845 4,024
Portfolio investment assets −17,660 83,415 −22,210 −59,743 −37,533
Equity and investment fund shares −67,646 31,868 31,754 −94,908 −126,662
Debt securities 49,986 51,547 −53,964 35,165 89,129
Short-term securities 425 20,797 −33,155 16,149 49,304
Long-term corporate securities 32,421 21,212 −14,190 11,148 25,338
Other long-term securities 17,140 9,538 −6,619 7,868 14,487
Other investment assets −118,596 −54,189 141,668 151,574 9,906
Currency and deposits −23,426 −22,998 68,005 20,928 −47,077
Loans −96,816 −29,151 71,630 132,567 60,937
Trade credit and advances 1,645 −2,040 2,033 −1,921 −3,954
Reserve assets 3,068 −177 2,105 208 −1,897
Monetary gold 0 0 0 0 0
Special drawing rights 33 43 47 57 10
Reserve position in the International Monetary Fund 3,136 −288 2,049 114 −1,935
Other reserve assets −101 68 9 38 29
           
Net U.S. incurrence of liabilities excluding financial derivatives (net increase in liabilities / financial inflow (+)) −126,092 127,770 286,247 167,902 −118,345
Direct investment liabilities 16,603 126,925 52,720 105,453 52,733
Equity 51,313 116,455 117,667 92,463 −25,204
Equity other than reinvestment of earnings 11,436 80,043 80,200 48,998 −31,202
Reinvestment of earnings 39,877 36,412 37,468 43,465 5,997
Debt instruments −34,710 10,470 −64,948 12,990 77,938
Portfolio investment liabilities −12,609 12,274 14,884 −7,740 −22,624
Equity and investment fund shares −38,297 −90,582 117,758 −206,073 −323,831
Debt securities 25,689 102,856 −102,874 198,334 301,208
Short term 37,032 −53,228 13,045 22,022 8,977
Treasury bills and certificates 33,597 −35,170 30,182 18,041 −12,141
Federally sponsored agency securities −693 −6,121 −2,082 3,901 5,983
Other short-term securities 4,128 −11,937 −15,055 80 15,135
Long term −11,343 156,085 −115,919 176,312 292,231
Treasury bonds and notes −19,373 96,764 −83,006 126,275 209,281
Federally sponsored agency securities 20,761 19,460 16,295 21,438 5,143
Corporate bonds and notes −14,115 39,939 −47,683 27,560 75,243
Other 1,384 −78 −1,525 1,039 2,564
Other investment liabilities −130,087 −11,430 218,644 70,189 −148,455
Currency (short term) 19,391 19,606 9,364 5,249 −4,115
Deposits −76,087 −26,639 95,229 −36,864 −132,093
Loans −78,009 −6,605 114,887 95,259 −19,628
Trade credit and advances 4,619 2,208 −836 6,545 7,381
Special drawing rights allocations 0 0 0 0 0
p
Preliminary
r
Revised

Note. The statistics are presented in table 1.2, table 6.1, table 7.1, and table 8.1 on BEA’s website.

In the international transactions accounts, income on equity, or earnings, of foreign affiliates of U.S. multinational enterprises consists of a portion that is repatriated to the parent company in the United States in the form of dividends and a portion that is reinvested in foreign affiliates. In response to the 2017 Tax Cuts and Jobs Act, which generally eliminated taxes on repatriated earnings, some U.S. multinational enterprises repatriated accumulated prior earnings of their foreign affiliates. In the first, second, and fourth quarters of 2018, the repatriation of dividends exceeded current-period earnings, resulting in negative values being recorded for reinvested earnings. In primary income in the first quarter of 2019, dividends were $100.2 billion, while reinvested earnings were $40.2 billion (chart 7 and table E). The reinvested earnings are also reflected in the net acquisition of direct investment assets in the financial account (table D).

For more information, see “How does the 2017 Tax Cuts and Jobs Act affect BEA’s business income statistics?” and “How are the international transactions accounts affected by an increase in direct investment dividend receipts?”

Chart 7. Direct Investment Income Receipts and Components, Line Chart.

[Click chart to expand]

Table E. Direct Investment Earnings Receipts
[Millions of dollars, seasonally adjusted]
  2017 2018 2019
Ir IIr IIIr IVr Ir IIr IIIr IVr Ip
Direct investment earnings 114,743 115,429 122,185 130,702 134,297 139,437 139,162 133,966 140,450
Dividends 38,215 34,881 55,110 26,874 285,885 223,792 120,231 146,605 100,246
Reinvested earnings 76,528 80,548 67,075 103,828 −151,588 −84,355 18,931 −12,639 40,204
p
Preliminary
r
Revised

The U.S. international transactions statistics for the first quarter of 2014 through the fourth quarter of 2018 have been updated to incorporate newly available and revised source data and updated seasonal factors (table F).

For more information, see Eric Bryda, C. Omar Kebbeh, and Ted Peck, “Annual Update of the U.S. International Transactions Accounts,” in this issue of the Survey of Current Business.

Table F. Updates to the Fourth-Quarter 2018 International Transactions Aggregates
[Millions of dollars, seasonally adjusted]
  Preliminary estimates Revised estimates
Balance on current account −134,377 −143,927
Balance on goods −233,053 −232,323
Balance on services 66,090 61,177
Balance on primary income 60,435 60,059
Balance on secondary income (current transfers) −27,849 −32,841
Balance on capital account 8,856 2,721
Net lending or borrowing from financial-account transactions −168,310 −161,621
Net U.S. acquisition of financial assets 171,967 147,259
Net U.S. incurrence of liabilities 320,216 286,247
Financial derivatives other than reserves, net transactions −20,061 −22,632