Chronicling 100 Years of the U.S. Economy

July 2021
Volume 101, Number 7

U.S. International Transactions

First Quarter 2021

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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, widened by $20.7 billion, or 11.8 percent, to $195.7 billion in the first quarter of 2021 (chart 1 and table A). The revised fourth-quarter deficit was $175.1 billion.

The first-quarter deficit was 3.6 percent of current-dollar gross domestic product, up from 3.3 percent in the fourth quarter.

The $20.7 billion widening of the current-account deficit in the first quarter mostly reflected an increased deficit on goods and a reduced surplus on primary income.

Table A. U.S. International Transactions
[Millions of dollars, seasonally adjusted]
Series 2020 2021 Change 2020:Q4 to 2021:Q1
Q2 r Q3 r Q4 r Q1 p
Current account          
Exports of goods and services and income receipts (credits) 707,716 806,445 851,907 888,746 36,839
Exports of goods and services 454,987 523,259 558,795 584,450 25,655
Goods 289,779 356,826 384,050 408,579 24,529
Services 165,208 166,433 174,745 175,871 1,126
Primary income receipts 212,111 240,265 252,040 261,650 9,610
Secondary income (current transfer) receipts 40,618 42,921 41,072 42,645 1,573
Imports of goods and services and income payments (debits) 861,582 978,807 1,026,986 1,084,485 57,499
Imports of goods and services 613,536 710,359 755,582 797,209 41,627
Goods 513,050 602,196 637,175 677,037 39,862
Services 100,485 108,163 118,406 120,172 1,766
Primary income payments 177,587 192,008 197,824 211,366 13,542
Secondary income (current transfer) payments 70,459 76,440 73,580 75,910 2,330
Capital account          
Capital transfer receipts and other credits 4 348 9 25 16
Capital transfer payments and other debits 951 898 1,133 2,764 1,631
Financial account          
Net U.S. acquisition of financial assets excluding financial derivatives (net increase in assets / financial outflow (+)) −253,779 29,307 228,289 382,022 153,733
Direct investment assets 63,839 122,349 96,702 64,039 −32,663
Portfolio investment assets −10,340 121,217 53,940 304,691 250,751
Other investment assets −312,239 −216,078 75,209 15,391 −59,818
Reserve assets 4,960 1,820 2,438 −2,100 −4,538
Net U.S. incurrence of liabilities excluding financial derivatives (net increase in liabilities / financial inflow (+)) −181,226 201,141 502,122 554,904 52,782
Direct investment liabilities −46,832 111,589 101,824 64,540 −37,284
Portfolio investment liabilities 272,485 114,935 350,675 326,494 −24,181
Other investment liabilities −406,879 −25,383 49,623 163,869 114,246
Financial derivatives other than reserves, net transactions −11,702 28,425 2,633 −2,344 −4,977
Statistical discrepancy          
Statistical discrepancy1 70,556 29,504 −94,997 23,253 118,250
Balances          
Balance on current account −153,866 −172,362 −175,079 −195,739 −20,660
Balance on goods and services −158,549 −187,101 −196,787 −212,759 −15,972
Balance on goods −223,271 −245,370 −253,125 −268,457 −15,332
Balance on services 64,723 58,270 56,339 55,699 −640
Balance on primary income 34,524 48,257 54,216 50,284 −3,932
Balance on secondary income −29,841 −33,519 −32,508 −33,264 −756
Balance on capital account −946 −550 −1,124 −2,740 −1,616
Net lending (+) or net borrowing (−) from current- and capital-account transactions2 −154,812 −172,912 −176,203 −198,479 −22,276
Net lending (+) or net borrowing (−) from financial-account transactions3 −84,255 −143,408 −271,199 −175,226 95,973
p
Preliminary
r
Revised

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

Exports of goods and services to, and income received from, foreign residents increased $36.8 billion to $888.7 billion in the first quarter (charts 2 and 3 and tables A and B). Imports of goods and services from, and income paid to, foreign residents increased $57.5 billion to $1.08 trillion (charts 2 and 4 and tables A and C).

Trade in goods

Exports of goods increased $24.5 billion to $408.6 billion, and imports of goods increased $39.9 billion to $677.0 billion. The increases in both exports and imports reflected increases in nearly all major categories, led by industrial supplies and materials, primarily petroleum and products, that were partly offset by a decrease in automotive vehicles, parts, and engines.

Chart 2. Current-Account Transactions

[Click chart to expand]

Trade in services

Exports of services increased $1.1 billion to $175.9 billion, reflecting mostly offsetting changes in several major categories. Increases were led by travel, mainly other personal travel; decreases were led by charges for the use of intellectual property, mainly for licenses to reproduce and/or distribute computer software. Imports of services increased $1.8 billion to $120.2 billion, mostly reflecting an increase in transport, primarily sea freight transport.

Primary income

Receipts of primary income increased $9.6 billion to $261.7 billion, mostly reflecting an increase in direct investment income, primarily earnings. Payments of primary income increased $13.5 billion to $211.4 billion, mainly reflecting increases in direct investment income, mostly earnings, and in portfolio investment income, mostly interest on long-term debt securities.

Secondary income

Receipts of secondary income increased $1.6 billion to $42.6 billion, mostly reflecting an increase in general government transfers, primarily public-sector fines and penalties. Payments of secondary income increased $2.3 billion to $75.9 billion, mainly reflecting an increase in general government transfers, primarily international cooperation.

Table B. Exports of Goods and Services and Income Receipts
[Millions of dollars, seasonally adjusted]
Series 2020 2021 Change 2020:Q4 to 2021:Q1
Q2 r Q3 r Q4 r Q1 p
Exports of goods and services and income receipts 707,716 806,445 851,907 888,746 36,839
Exports of goods 289,779 356,826 384,050 408,579 24,529
General merchandise 284,404 349,705 376,467 398,443 21,976
Foods, feeds, and beverages 32,321 34,741 38,922 40,667 1,745
Industrial supplies and materials 92,551 108,713 119,483 134,752 15,269
Energy products 30,769 39,385 42,678 52,232 9,554
Of which: Petroleum and products 24,390 32,819 33,665 40,148 6,483
Nonenergy products 61,782 69,328 76,805 82,520 5,715
Capital goods except automotive 99,585 112,003 117,444 122,323 4,879
Automotive vehicles, parts, and engines 15,328 36,438 38,372 37,395 −977
Consumer goods except food and automotive 33,526 44,822 48,781 48,256 −525
Other general merchandise 11,092 12,987 13,464 15,051 1,587
Net exports of goods under merchanting 230 252 276 302 26
Nonmonetary gold 5,145 6,869 7,307 9,833 2,526
Exports of services1 165,208 166,433 174,745 175,871 1,126
Manufacturing services on physical inputs owned by others n.a. n.a. n.a. n.a. n.a.
Maintenance and repair services n.i.e. 3,440 2,833 2,820 2,982 162
Transport 11,002 12,191 13,301 13,925 624
Travel (for all purposes including education) 13,914 10,527 11,967 13,426 1,459
Business 1,616 1,854 2,229 2,524 295
Personal 12,298 8,673 9,738 10,903 1,165
Construction 624 596 505 498 −7
Insurance services 4,769 5,353 5,281 5,351 70
Financial services 35,106 36,004 37,944 38,154 210
Charges for the use of intellectual property n.i.e. 26,960 28,757 30,343 28,183 −2,160
Telecommunications, computer, and information services 13,719 13,501 15,505 14,493 −1,012
Other business services 46,460 45,402 45,869 47,199 1,330
Personal, cultural, and recreational services 4,119 5,740 5,777 6,018 241
Government goods and services n.i.e. 5,095 5,528 5,433 5,641 208
Primary income receipts 212,111 240,265 252,040 261,650 9,610
Investment income 210,530 238,676 250,444 260,033 9,589
Direct investment income 104,885 132,107 141,436 150,171 8,735
Income on equity 100,330 127,692 137,130 146,132 9,002
Dividends and withdrawals 72,846 58,041 50,926 86,790 35,864
Reinvested earnings 27,484 69,651 86,204 59,342 −26,862
Interest 4,555 4,415 4,306 4,039 −267
Portfolio investment income 88,773 91,205 94,038 95,832 1,794
Income on equity and investment fund shares 58,402 59,988 62,513 62,068 −445
Interest on debt securities 30,371 31,217 31,525 33,763 2,238
Other investment income 16,807 15,321 14,974 13,965 −1,009
Reserve asset income 65 44 −3 65 68
Compensation of employees 1,581 1,588 1,596 1,617 21
Secondary income (current transfer) receipts2 40,618 42,921 41,072 42,645 1,573
p
Preliminary
r
Revised
n.a.
Not available
n.i.e.
Not included elsewhere

Note. The statistics are presented in International Transactions Accounts 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]
Series 2020 2021 Change 2020:Q4 to 2021:Q1
Q2 r Q3 r Q4 r Q1 p
Imports of goods and services and income payments 861,582 978,807 1,026,986 1,084,485 57,499
Imports of goods 513,050 602,196 637,175 677,037 39,862
General merchandise 480,008 587,803 629,137 670,160 41,023
Foods, feeds, and beverages 36,951 39,734 40,104 41,284 1,180
Industrial supplies and materials 90,706 103,738 114,295 136,107 21,812
Energy products 23,344 31,305 34,917 46,612 11,695
Of which: Petroleum and products 20,619 28,333 31,241 42,535 11,294
Nonenergy products 67,362 72,433 79,378 89,495 10,117
Capital goods except automotive 147,162 165,285 173,646 183,776 10,130
Automotive vehicles, parts, and engines 41,249 85,142 96,590 90,642 −5,948
Consumer goods except food and automotive 142,617 167,608 177,787 190,923 13,136
Other general merchandise 21,323 26,297 26,716 27,428 712
Nonmonetary gold 33,042 14,393 8,038 6,877 −1,161
Imports of services1 100,485 108,163 118,406 120,172 1,766
Manufacturing services on physical inputs owned by others n.a. n.a. n.a. n.a. n.a.
Maintenance and repair services n.i.e. 1,393 1,508 1,562 1,810 248
Transport 13,934 16,227 18,728 20,073 1,345
Travel (for all purposes including education) 2,383 3,687 7,559 7,943 384
Business 304 568 1,172 1,253 81
Personal 2,079 3,118 6,387 6,690 303
Construction 261 227 312 292 −20
Insurance services 13,383 14,381 14,399 14,481 82
Financial services 10,447 10,204 10,869 10,636 −233
Charges for the use of intellectual property n.i.e. 9,004 11,165 11,959 12,464 505
Telecommunications, computer, and information services 9,377 9,263 10,156 9,898 −258
Other business services 28,607 29,342 30,598 30,539 −59
Personal, cultural, and recreational services 5,547 6,027 6,067 5,781 −286
Government goods and services n.i.e. 6,147 6,132 6,197 6,255 58
Primary income payments 177,587 192,008 197,824 211,366 13,542
Investment income 174,266 188,552 194,211 207,526 13,315
Direct investment income 34,101 50,147 53,342 63,078 9,736
Portfolio investment income 118,651 119,840 122,822 127,711 4,889
Income on equity and investment fund shares 41,226 41,795 44,659 46,464 1,805
Interest on debt securities 77,425 78,045 78,163 81,247 3,084
Other investment income 21,514 18,566 18,048 16,736 −1,312
Compensation of employees 3,321 3,456 3,613 3,840 227
Secondary income (current transfer) payments2 70,459 76,440 73,580 75,910 2,330
           
Supplemental detail on insurance transactions:          
Premiums paid 33,447 37,034 36,435 37,307 872
Losses recovered 25,372 25,481 25,145 25,386 241
p
Preliminary
r
Revised
n.a.
Not available
n.i.e.
Not included elsewhere

Note. The statistics are presented in International Transactions Accounts table 1.2, table 2.1, table 3.1, table 4.1, and table 5.1 on BEA's website.

Capital transfer payments increased $1.6 billion to $2.8 billion in the first quarter, mostly reflecting an increase in investment grants (table A).

Net financial-account transactions were −$175.2 billion in the first quarter, reflecting net U.S. borrowing from foreign residents.

Financial assets

First-quarter transactions increased U.S. residents’ foreign financial assets by $382.0 billion (charts 5 and 6 and table D). Transactions increased portfolio investment assets, primarily long-term debt securities, by $304.7 billion; direct investment assets, primarily equity, by $64.0 billion; and other investment assets, primarily loans, by $15.4 billion. Transactions decreased reserve assets by $2.1 billion.

Liabilities

First-quarter transactions increased U.S. liabilities to foreign residents by $554.9 billion. Transactions increased portfolio investment liabilities, primarily long-term debt securities, by $326.5 billion; other investment liabilities, primarily deposits and loans, by $163.9 billion; and direct investment liabilities, primarily equity, by $64.5 billion.

Financial derivatives

Net transactions in financial derivatives were −$2.3 billion in the first quarter, reflecting net U.S. 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]
Series 2020 2021 Change 2020:Q4 to 2021:Q1
Q2 r Q3 r Q4 r Q1 p
Net U.S. acquisition of financial assets excluding financial derivatives (net increase in assets / financial outflow (+)) −253,779 29,307 228,289 382,022 153,733
Direct investment assets 63,839 122,349 96,702 64,039 −32,663
Equity 117,719 79,749 86,913 75,056 −11,857
Equity other than reinvestment of earnings 90,235 10,098 709 15,714 15,005
Reinvestment of earnings 27,484 69,651 86,204 59,342 −26,862
Debt instruments −53,879 42,600 9,789 −11,017 −20,806
Portfolio investment assets −10,340 121,217 53,940 304,691 250,751
Equity and investment fund shares −71,865 88,690 −42,526 86,335 128,861
Debt securities 61,525 32,527 96,466 218,356 121,890
Short-term securities 20,509 19,457 29,440 38,762 9,322
Long-term corporate securities 32,767 10,094 50,875 130,130 79,255
Other long-term securities 8,249 2,976 16,151 49,464 33,313
Other investment assets −312,239 −216,078 75,209 15,391 −59,818
Other equity 10 215 324 1,169 845
Currency and deposits −313,148 −130,385 −6,533 −10,750 −4,217
Loans 6,145 −84,148 77,929 21,087 −56,842
Trade credit and advances −5,245 −1,761 3,489 3,884 395
Reserve assets 4,960 1,820 2,438 −2,100 −4,538
Monetary gold 0 0 0 0 0
Special drawing rights 20 5 7 8 1
Reserve position in the International Monetary Fund 4,902 1,785 2,454 −2,157 −4,611
Other reserve assets 38 29 −23 50 73
Net U.S. incurrence of liabilities excluding financial derivatives (net increase in liabilities / financial inflow (+)) −181,226 201,141 502,122 554,904 52,782
Direct investment liabilities −46,832 111,589 101,824 64,540 −37,284
Equity 29,210 42,809 82,922 68,036 −14,886
Equity other than reinvestment of earnings 22,588 13,307 51,302 29,201 −22,101
Reinvestment of earnings 6,622 29,502 31,620 38,835 7,215
Debt instruments −76,041 68,780 18,902 −3,496 −22,398
Portfolio investment liabilities 272,485 114,935 350,675 326,494 −24,181
Equity and investment fund shares 21,647 117,901 246,335 99,610 −146,725
Debt securities 250,838 −2,966 104,340 226,885 122,545
Short term 327,889 −38,910 1,406 −44,419 −45,825
Treasury bills and certificates 311,140 −23,352 10,017 −60,815 −70,832
Federally sponsored agency securities 2,662 −3,444 −1,778 −3,419 −1,641
Other short-term securities 14,087 −12,114 −6,833 19,815 26,648
Long term −77,050 35,944 102,935 271,304 168,369
Treasury bonds and notes −202,570 63,639 50,485 223,026 172,541
Federally sponsored agency securities −56,987 −51,228 11,801 −24,416 −36,217
Corporate bonds and notes 176,273 21,323 40,629 70,180 29,551
Other 6,234 2,210 20 2,514 2,494
Other investment liabilities −406,879 −25,383 49,623 163,869 114,246
Other equity n.a. n.a. n.a. n.a. n.a
Currency 29,399 36,861 29,051 10,092 −18,959
Deposits −272,486 −40,913 33,304 83,835 50,531
Loans −165,191 −22,984 −18,784 65,042 83,826
Trade credit and advances 1,399 1,653 6,052 4,900 −1,152
Special drawing rights allocations 0 0 0 0 0
p
Preliminary
r
Revised
n.a.
Not available

Note. The statistics are presented in International Transactions Accounts 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 first quarter of 2013 through the fourth quarter of 2020 have been updated to incorporate newly available and revised source data and updated seasonal adjustments (table E). For more information, see Ami Adjoh-Baliki and Jason Sutterley, “Annual Update of the U.S. International Transactions Accounts,” in this issue of the Survey.

Table E. Updates to the Fourth-Quarter 2020 International Transactions Aggregates
[Millions of dollars, seasonally adjusted]
Series Preliminary Estimates Revised Estimates
Balance on current account −188,484 −175,079
Balance on goods −252,957 −253,125
Balance on services 52,972 56,339
Balance on primary income 47,861 54,216
Balance on secondary income (current transfers) −36,361 −32,508
Net lending or borrowing from financial-account transactions −262,383 −271,199
Net U.S. acquisition of financial assets 149,788 228,289
Net U.S. incurrence of liabilities 414,804 502,122
Financial derivatives other than reserves, net transactions 2,633 2,633