Survey of Current Business
January 2020
Volume 100, Number 1

U.S. International Transactions

Third Quarter 2019

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The U.S. current-account deficit, which reflects the combined balances on trade in goods and services and income flows between U.S. residents and residents of other countries, narrowed by $1.1 billion, or 0.9 percent, to $124.1 billion in the third quarter of 2019 (chart 1 and table A). The revised second-quarter deficit was $125.2 billion.

The deficit was 2.3 percent of current-dollar gross domestic product, down less than 0.1 percent from the second quarter.

The $1.1 billion narrowing of the current-account deficit in the third quarter mainly reflected a reduced deficit on goods and an expanded surplus on primary income.

Table A. U.S. International Transactions
[Millions of dollars, seasonally adjusted]
  2018 2019 Change 2019:II to 2019:III
IV I II r II p
Current account          
Exports of goods and services and income receipts (credits) 938,689 940,922 948,676 944,386 −4,290
Exports of goods and services 623,761 626,970 626,953 625,795 −1,158
Goods 416,964 419,100 414,694 413,812 −882
Services 206,797 207,870 212,259 211,983 −276
Primary income receipts 276,483 278,138 286,142 282,007 −4,135
Secondary income (current transfer) receipts 38,445 35,814 35,581 36,584 1,003
Imports of goods and services and income payments (debits) 1,082,616 1,077,116 1,073,886 1,068,480 −5,406
Imports of goods and services 794,907 783,443 786,061 783,153 −2,908
Goods 649,288 635,844 637,911 633,370 −4,541
Services 145,620 147,599 148,150 149,784 1,634
Primary income payments 216,424 221,275 219,517 213,288 −6,229
Secondary income (current transfer) payments 71,285 72,399 68,307 72,039 3,732
Capital account          
Capital transfer receipts and other credits 2,723 0 0 0 0
Capital transfer payments and other debits 2 0 0 10 10
Financial account          
Net U.S. acquisition of financial assets excluding financial derivatives (net increase in assets / financial outflow (+)) 147,259 110,967 142,153 123,516 −18,637
Direct investment assets 25,696 7,878 111,272 33,320 −77,952
Portfolio investment assets −22,210 −41,876 26,706 18,461 −8,245
Other investment assets 141,668 144,757 1,815 69,852 68,037
Reserve assets 2,105 208 2,359 1,882 −477
Net U.S. incurrence of liabilities excluding financial derivatives (net increase in liabilities / financial inflow (+)) 286,247 126,280 345,893 164,922 −180,971
Direct investment liabilities 52,720 110,079 93,251 37,642 −55,609
Portfolio investment liabilities 14,884 −42,822 181,016 86,479 −94,537
Other investment liabilities 218,644 59,023 71,626 40,801 −30,825
Financial derivatives other than reserves, net transactions −22,632 −21,421 −9,642 −6,456 3,186
Statistical discrepancy          
Statistical discrepancy1 −20,414 99,461 −88,173 76,242 164,415
Balances          
Balance on current account −143,927 −136,194 −125,210 −124,094 1,116
Balance on goods and services −171,146 −156,473 −159,108 −157,358 1,750
Balance on goods −232,323 −216,744 −223,218 −219,558 3,660
Balance on services 61,177 60,271 64,109 62,199 −1,910
Balance on primary income 60,059 56,864 66,625 68,719 2,094
Balance on secondary income −32,841 −36,585 −32,726 −35,454 −2,728
Balance on capital account 2,721 0 0 −10 −10
Net lending (+) or net borrowing (−) from current- and capital-account transactions2 −141,206 −136,194 −125,210 −124,105 1,105
Net lending (+) or net borrowing (−) from financial-account transactions3 −161,621 −36,734 −213,382 −47,862 165,520
p
Preliminary
r
Revised

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

Exports of goods and services to, and income received from, foreign residents decreased $4.3 billion to $944.4 billion in the third quarter (charts 2 and 3 and table B). Imports of goods and services from, and income paid to, foreign residents decreased $5.4 billion to $1.07 trillion (charts 2 and 4 and table C).

Trade in goods

Exports of goods decreased $0.9 billion to $413.8 billion, and imports of goods decreased $4.5 billion to $633.4 billion. The decreases in both exports and imports mainly reflected decreases in industrial supplies and materials, primarily petroleum and products.

Trade in services

Exports of services decreased $0.3 billion to $212.0 billion, reflecting partly offsetting changes across major categories. Decreases were led by travel, mainly other personal travel, and increases were led by other business services, mainly professional and management consulting services. Imports of services increased $1.6 billion to $149.8 billion, reflecting increases in nearly all major categories. Increases were led by insurance services, mainly reinsurance.

Primary income

Receipts of primary income decreased $4.1 billion to $282.0 billion, and payments of primary income decreased $6.2 billion to $213.3 billion. The decreases in both receipts and payments mainly reflected decreases in direct investment income and in other investment income. Within direct investment income receipts, dividends increased $24.9 billion to $95.3 billion in the third quarter and remain elevated since the passage of the 2017 Tax Cuts and Jobs Act, which generally eliminated taxes on repatriated earnings beginning in 2018. For more information, see “How do the effects of the 2017 Tax Cuts and Jobs Act appear in BEA's direct investment statistics?” The decreases in other investment income receipts and payments mainly reflected decreases in interest on loans and deposits.

Secondary income

Receipts of secondary income increased $1.0 billion to $36.6 billion, mainly reflecting an increase in private sector fines and penalties, a component of private transfer receipts. Payments of secondary income increased $3.7 billion to $72.0 billion, mainly reflecting increases in U.S. government grants and in insurance-related transfers, a component of private transfer payments.

Table B. Exports of Goods and Services and Income Receipts
[Millions of dollars, seasonally adjusted]
  2018 2019 Change 2019:II to 2019:III
IV I II r III p
Exports of goods and services and income receipts 938,689 940,922 948,676 944,386 −4,290
Exports of goods 416,964 419,100 414,694 413,812 −882
General merchandise 412,683 414,383 410,444 408,782 −1,662
Foods, feeds, and beverages 29,988 32,737 35,206 34,829 −377
Industrial supplies and materials 136,077 130,689 132,934 129,810 −3,124
Energy products 57,659 53,445 56,953 54,851 −2,102
Of which: Petroleum and products 50,018 46,006 49,472 47,590 −1,882
Nonenergy products 78,418 77,244 75,981 74,959 −1,022
Capital goods except automotive 142,219 142,068 135,685 135,118 −567
Automotive vehicles, parts, and engines 37,827 41,274 40,255 41,460 1,205
Consumer goods except food and automotive 51,917 52,963 51,465 51,812 347
Other general merchandise 14,655 14,651 14,899 15,753 854
Net exports of goods under merchanting 68 92 85 87 2
Nonmonetary gold 4,214 4,625 4,165 4,943 778
           
Exports of services1 206,797 207,870 212,259 211,983 −276
Maintenance and repair services n.i.e. 8,225 8,062 7,743 8,060 317
Transport 22,882 23,029 23,260 22,769 −491
Travel (for all purposes including education) 53,297 54,256 53,436 52,803 −633
Business 9,504 9,527 9,570 9,446 −124
Personal 43,793 44,729 43,867 43,357 −510
Insurance services 4,417 4,404 4,359 4,388 29
Financial services 27,854 27,319 28,714 28,915 201
Charges for the use of intellectual property n.i.e. 31,467 31,571 32,745 32,308 −437
Telecommunications, computer, and information services 11,230 11,407 11,887 12,122 235
Other business services 42,074 42,931 44,838 45,403 565
Government goods and services n.i.e. 5,350 4,890 5,276 5,215 −61
           
Primary income receipts 276,483 278,138 286,142 282,007 −4,135
Investment income 274,786 276,434 284,432 280,293 −4,139
Direct investment income 141,248 143,545 147,653 144,559 −3,094
Portfolio investment income 107,568 103,721 107,619 108,693 1,074
Income on equity and investment fund shares 71,983 68,621 72,181 72,820 639
Interest on debt securities 35,586 35,100 35,438 35,874 436
Other investment income 25,783 28,935 28,912 26,798 −2,114
Reserve asset income 187 231 248 243 −5
Compensation of employees 1,697 1,704 1,710 1,714 4
Secondary income (current transfer) receipts2 38,445 35,814 35,581 36,584 1,003
p
Preliminary
r
Revised
n.i.e.
Not included elsewhere

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.

Table C. Imports of Goods and Services and Income Payments
[Millions of dollars, seasonally adjusted]
  2018 2019 Change 2019:II to 2019:III
IV I II r III p
Imports of goods and services and income payments 1,082,616 1,077,116 1,073,886 1,068,480 −5,406
Imports of goods 649,288 635,844 637,911 633,370 −4,541
General merchandise 646,669 633,933 636,136 630,446 −5,690
Foods, feeds, and beverages 37,358 37,488 38,609 38,383 −226
Industrial supplies and materials 144,308 134,257 136,596 129,948 −6,648
Energy products 60,804 54,733 60,771 53,835 −6,936
Of which: Petroleum and products 56,190 50,398 57,327 50,510 −6,817
Nonenergy products 83,504 79,524 75,825 76,113 288
Capital goods except automotive 175,102 172,328 170,702 169,820 −882
Automotive vehicles, parts, and engines 96,013 95,529 97,000 95,768 −1,232
Consumer goods except food and automotive 166,557 167,657 165,328 167,930 2,602
Other general merchandise 27,331 26,674 27,902 28,596 694
Nonmonetary gold 2,619 1,911 1,775 2,924 1,149
           
Imports of services1 145,620 147,599 148,150 149,784 1,634
Maintenance and repair services n.i.e. 2,287 2,163 2,276 2,302 26
Transport 28,119 27,925 27,449 27,309 −140
Travel (for all purposes including education) 37,364 37,799 37,797 37,901 104
Business 4,082 4,039 3,968 4,133 165
Personal 33,282 33,759 33,829 33,768 −61
Insurance services 11,369 11,680 12,131 12,790 659
Financial services 7,932 8,451 8,388 8,621 233
Charges for the use of intellectual property n.i.e. 14,445 14,256 14,242 14,526 284
Telecommunications, computer, and information services 10,690 10,309 10,761 10,863 102
Other business services 27,635 29,114 29,143 29,410 267
Government goods and services n.i.e. 5,779 5,903 5,961 6,062 101
           
Primary income payments 216,424 221,275 219,517 213,288 −6,229
Investment income 211,467 216,322 214,522 208,166 −6,356
Direct investment income 62,648 65,318 61,767 57,489 −4,278
Portfolio investment income 119,879 119,776 121,649 122,234 585
Income on equity and investment fund shares 40,874 40,849 42,723 42,573 −150
Interest on debt securities 79,004 78,927 78,926 79,661 735
Other investment income 28,941 31,228 31,106 28,443 −2,663
Compensation of employees 4,956 4,953 4,995 5,122 127
Secondary income (current transfer) payments2 71,285 72,399 68,307 72,039 3,732
p
Preliminary
r
Revised
n.i.e.
Not included elsewhere

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.

Net financial-account transactions were −$47.9 billion in the third quarter, reflecting net U.S. borrowing from foreign residents.

Financial assets

Third-quarter transactions increased U.S. residents' foreign financial assets by $123.5 billion (charts 5 and 6 and table D). Transactions increased direct investment assets, primarily equity, by $33.3 billion; portfolio investment assets, mainly debt securities, by $18.5 billion; other investment assets, primarily loans, by $69.9 billion; and reserve assets by $1.9 billion.

Liabilities

Third-quarter transactions increased U.S. liabilities to foreign residents by $164.9 billion. Transactions increased direct investment liabilities, mainly equity, by $37.6 billion; portfolio investment liabilities, mainly debt securities, by $86.5 billion; and other investment liabilities, mainly bank deposits, by $40.8 billion.

Financial derivatives

Net transactions in financial derivatives were −$6.5 billion in the third quarter, reflecting net borrowing from foreign residents.

Table D. Net U.S. Acquisition of Financial Assets and Net U.S. Incurrence of Liabilities
[Millions of dollars, seasonally adjusted]
  2018 2019 Change 2019:II to 2019:III
IV I II r III p
Net U.S. acquisition of financial assets excluding financial derivatives (net increase in assets / financial outflow (+)) 147,259 110,967 142,153 123,516 −18,637
Direct investment assets 25,696 7,878 111,272 33,320 −77,952
Equity 19,875 45,969 78,940 43,316 −35,624
Equity other than reinvestment of earnings 32,514 4,905 8,171 528 −7,643
Reinvestment of earnings −12,639 41,065 70,769 42,788 −27,981
Debt instruments 5,821 −38,091 32,332 −9,996 −42,328
Portfolio investment assets −22,210 −41,876 26,706 18,461 −8,245
Equity and investment fund shares 31,754 −50,488 −30,446 −61,109 −30,663
Debt securities −53,964 8,612 57,152 79,570 22,418
Short-term securities −33,155 16,591 23,109 43,554 20,445
Long-term corporate securities −14,190 −8,415 23,801 22,895 −906
Other long-term securities −6,619 436 10,242 13,121 2,879
Other investment assets 141,668 144,757 1,815 69,852 68,037
Currency and deposits 68,005 12,962 37,392 −6,516 −43,908
Loans 71,630 133,716 −34,814 71,837 106,651
Trade credit and advances 2,033 −1,921 −762 4,531 5,293
Reserve assets 2,105 208 2,359 1,882 −477
Monetary gold 0 0 0 0 0
Special drawing rights 47 57 60 63 3
Reserve position in the International Monetary Fund 2,049 114 2,248 1,754 −494
Other reserve assets 9 38 51 64 13
           
Net U.S. incurrence of liabilities excluding financial derivatives (net increase in liabilities / financial inflow (+)) 286,247 126,280 345,893 164,922 −180,971
Direct investment liabilities 52,720 110,079 93,251 37,642 −55,609
Equity 117,667 87,529 71,597 41,272 −30,325
Equity other than reinvestment of earnings 80,200 45,889 33,316 9,907 −23,409
Reinvestment of earnings 37,468 41,641 38,281 31,365 −6,916
Debt instruments −64,948 22,549 21,654 −3,630 −25,284
Portfolio investment liabilities 14,884 −42,822 181,016 86,479 −94,537
Equity and investment fund shares 117,758 −214,949 96,780 −64,803 −161,583
Debt securities −102,874 172,127 84,236 151,283 67,047
Short term 13,045 22,022 −78,972 62,280 141,252
Treasury bills and certificates 30,182 18,041 −57,630 42,275 99,905
Federally sponsored agency securities −2,082 3,901 47 −868 −915
Other short-term securities −15,055 80 −21,389 20,873 42,262
Long term −115,919 150,105 163,209 89,003 −74,206
Treasury bonds and notes −83,006 121,286 112,919 33,844 −79,075
Federally sponsored agency securities 16,295 10,670 19,732 11,237 −8,495
Corporate bonds and notes −47,683 17,366 31,959 43,087 11,128
Other −1,525 783 −1,401 835 2,236
Other investment liabilities 218,644 59,023 71,626 40,801 −30,825
Currency (short term) 9,364 5,249 9,356 19,110 9,754
Deposits 95,229 −36,613 104,297 74,020 −30,277
Loans 114,887 83,326 −42,876 −51,388 −8,512
Trade credit and advances −836 7,061 849 −942 −1,791
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.

The U.S. international transactions statistics for the second quarter have been updated to incorporate newly available and revised source data (table E).

Table E. Updates to the Second Quarter 2019 International Transactions Aggregates
[Millions of dollars, seasonally adjusted]
  Preliminary Estimates Revised Estimates
Balance on current account −128,188 −125,210
Balance on goods −223,328 −223,218
Balance on services 59,994 64,109
Balance on primary income 67,616 66,625
Balance on secondary income (current transfers) −32,470 −32,726
Balance on capital account 0 0
Net lending or borrowing from financial-account transactions −155,140 −213,382
Net U.S. acquisition of financial assets 208,217 142,153
Net U.S. incurrence of liabilities 354,137 345,893
Financial derivatives other than reserves, net transactions −9,220 −9,642