Chronicling 100 Years of the U.S. Economy

October 2021
Volume 101, Number 10

U.S. International Transactions

Second 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 $0.9 billion, or 0.5 percent, to $190.3 billion in the second quarter of 2021 (chart 1 and table A). The revised first-quarter deficit was $189.4 billion.

The second-quarter deficit was 3.3 percent of current-dollar gross domestic product, down from 3.4 percent in the first quarter.

The $0.9 billion widening of the current-account deficit in the second quarter mainly reflected reduced surpluses on services and on primary income that were mostly offset by a reduced deficit on secondary income.

Exports of goods and services to, and income received from, foreign residents increased $42.7 billion to $937.9 billion in the second quarter (charts 2 and 3 and tables A and B). Imports of goods and services from, and income paid to, foreign residents increased $43.6 billion, to $1.13 trillion (charts 2 and 4 and tables A and C).

Trade in goods

Exports of goods increased $28.3 billion to $436.6 billion, mostly reflecting increases in industrial supplies and materials, mainly petroleum and related products, and in capital goods, mainly civilian aircraft and semiconductors. Imports of goods increased $29.0 billion, to $706.3 billion, primarily reflecting an increase in industrial supplies and materials, mainly petroleum and related products and metals and nonmetallic products.

Trade in services

Exports of services increased $7.6 billion, to $189.1 billion, primarily reflecting an increase in travel, mostly other personal travel. Imports of services increased $9.1 billion, to $127.8 billion, mostly reflecting increases in transport, primarily sea freight and air passenger transport, and in travel, primarily other personal travel.

Primary income

Receipts of primary income increased $7.7 billion, to $270.6 billion, and payments of primary income increased $8.8 billion, to $221.5 billion. The increases in both receipts and payments mainly reflected increases in direct investment income, primarily earnings.

Secondary income

Receipts of secondary income decreased $0.9 billion, to $41.6 billion, mainly reflecting a decrease in general government transfers, mostly public sector fines and penalties. Payments of secondary income decreased $3.5 billion, to $72.6 billion, mainly reflecting a decrease in general government transfers, mostly international cooperation.

Capital-transfer payments decreased $1.9 billion, to $0.9 billion, in the second quarter, mostly reflecting a decrease in investment grants (table A).

 

Net financial-account transactions were −$287.3 billion in the second quarter, reflecting net U.S. borrowing from foreign residents.

Financial assets

Second-quarter transactions increased U.S. residents' foreign financial assets by $248.2 billion (charts 5 and 6 and table D). Transactions increased direct investment assets, primarily equity, by $139.7 billion; portfolio investment assets, primarily equity securities, by $134.8 billion; and reserve assets by $0.5 billion. Transactions decreased other investment assets by $26.7 billion, driven by deposits.

Liabilities

Second-quarter transactions increased U.S. liabilities to foreign residents by $527.0 billion. Transactions increased portfolio investment liabilities, primarily long-term debt securities, by $236.6 billion; other investment liabilities, mostly loans and deposits, by $195.4 billion; and direct investment liabilities, mostly equity, by $95.0 billion.

Financial derivatives

Net transactions in financial derivatives were −$8.6 billion in the second quarter, reflecting net U.S. borrowing from foreign residents.

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