Chronicling 100 Years of the U.S. Economy

January 2021
Volume 101, Number 1

U.S. International Investment Position

Third Quarter 2020

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The U.S. net international investment position—the difference between U.S. residents’ foreign financial assets and liabilities—was −$13.95 trillion at the end of the third quarter of 2020 (chart 1). Assets totaled $29.41 trillion and liabilities were $43.36 trillion. At the end of the second quarter, the net investment position was −$13.08 trillion.

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. A negative net investment position represents a U.S. net liability to the rest of the world.

The −$865.6 billion change in the net investment position from the second quarter to the third quarter came from net financial transactions of −$219.9 billion and net other changes in position, such as price and exchange-rate changes, of −$645.7 billion (table A).

 

 

U.S. assets increased by $629.2 billion, to a total of $29.41 trillion at the end of the third quarter, reflecting increases in portfolio investment and direct investment assets that were partly offset by decreases in other investment assets and in financial derivatives (chart 2). Portfolio investment assets increased by $684.7 billion, to $13.07 trillion, and direct investment assets increased by $370.8 billion, to $8.32 trillion, driven mainly by the appreciation of major foreign currencies against the U.S. dollar and by foreign stock price increases that raised the value of these assets.

Other changes in position drove the overall increase in U.S. assets (table A).

U.S. liabilities increased by $1.49 trillion, to a total of $43.36 trillion at the end of the third quarter, reflecting increases in portfolio investment and direct investment liabilities that were partly offset by decreases in financial derivatives and in other investment liabilities (chart 3). Portfolio investment liabilities increased by $967.8 billion, to $23.01 trillion, and direct investment liabilities increased by $762.3 billion, to $10.85 trillion, driven mainly by U.S. stock price increases that raised the value of these liabilities.

Other changes in position drove the overall increase in U.S. liabilities (table A).

The U.S. international investment position statistics for the second quarter of 2020 have been updated to incorporate newly available and revised source data (table B).