Survey of Current Business

Survey of Current Business
Chronicling 100 Years of the U.S. Economy

January 2022
Volume 102, Number 1

U.S. International Transactions

Third 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 $16.5 billion, or 8.3 percent, to $214.8 billion in the third quarter of 2021 (chart 1 and table A). The revised second-quarter deficit was $198.3 billion.

The third-quarter deficit was 3.7 percent of current-dollar gross domestic product, up from 3.5 percent in the second quarter.

The $16.5 billion widening of the current-account deficit in the third quarter reflected a reduced surplus on services and expanded deficits on secondary income and on goods that were partly offset by an expanded surplus on primary income.

Table A. U.S. International Transactions
[Millions of dollars, seasonally adjusted]
  2020 2021 Change 2021:Q2 to 2021:Q3
Q4 Q1 Q2 r Q3 p
Current account          
Exports of goods and services and income receipts (credits) 851,907 895,258 933,130 955,936 22,806
Exports of goods and services 558,795 589,805 627,646 632,423 4,777
Goods 384,050 408,344 436,766 441,594 4,828
Services 174,745 181,461 190,879 190,829 −50
Primary income receipts 252,040 262,922 263,988 281,908 17,920
Secondary income (current transfer) receipts 41,072 42,531 41,497 41,605 108
Imports of goods and services and income payments (debits) 1,026,986 1,084,681 1,131,449 1,170,710 39,261
Imports of goods and services 755,582 795,902 834,707 857,386 22,679
Goods 637,175 677,232 706,381 716,421 10,040
Services 118,406 118,670 128,327 140,966 12,639
Primary income payments 197,824 212,732 225,160 233,746 8,586
Secondary income (current transfer) payments 73,580 76,048 71,581 79,578 7,997
Capital account          
Capital transfer receipts and other credits 9 23 8 3,815 3,807
Capital transfer payments and other debits 1,133 2,765 870 809 −61
Financial account          
Net U.S. acquisition of financial assets excluding financial derivatives (net increase in assets / financial outflow (+)) 228,289 395,838 236,949 494,066 257,117
Direct investment assets 96,702 76,945 165,005 98,228 −66,777
Portfolio investment assets 53,940 294,204 126,195 311,733 185,538
Other investment assets 75,209 26,788 −54,728 −28,498 26,230
Reserve assets 2,438 −2,100 477 112,603 112,126
Net U.S. incurrence of liabilities excluding financial derivatives (net increase in liabilities / financial inflow (+)) 502,122 574,400 445,166 613,299 168,133
Direct investment liabilities 101,824 70,558 85,858 149,122 63,264
Portfolio investment liabilities 350,675 323,752 198,105 146,205 −51,900
Other investment liabilities 49,623 180,090 161,204 317,971 156,767
Financial derivatives other than reserves, net transactions 2,633 −2,216 −8,612 −7,980 632
Statistical discrepancy          
Statistical discrepancy1 −94,997 11,388 −17,648 84,556 102,204
Balances          
Balance on current account −175,079 −189,424 −198,319 −214,774 −16,455
Balance on goods and services −196,787 −206,097 −207,062 −224,964 −17,902
Balance on goods −253,125 −268,889 −269,614 −274,827 −5,213
Balance on services 56,339 62,791 62,552 49,863 −12,689
Balance on primary income 54,216 50,190 38,827 48,162 9,335
Balance on secondary income −32,508 −33,516 −30,084 −37,972 −7,888
Balance on capital account −1,124 −2,743 −863 3,005 3,868
Net lending (+) or net borrowing (−) from current- and capital-account transactions2 −176,203 −192,166 −199,181 −211,769 −12,588
Net lending (+) or net borrowing (−) from financial-account transactions3 −271,199 −180,778 −216,829 −127,213 89,616
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 $22.8 billion to $955.9 billion in the third quarter (charts 2 and 3 and tables A and B). Imports of goods and services from, and income paid to, foreign residents increased $39.3 billion to $1.17 trillion (charts 2 and 4 and tables A and C).

Trade in goods

Exports of goods increased $4.8 billion to $441.6 billion, mainly reflecting increases in industrial supplies and materials, mostly natural gas and petroleum and products, and in consumer goods, mostly medicinal, dental, and pharmaceutical products. A decrease in foods, feeds, and beverages, mostly corn and soybeans, partly offset these increases. Imports of goods increased $10.0 billion to $716.4 billion, primarily reflecting an increase in industrial supplies and materials, mostly petroleum and products and chemicals.

Trade in services

Exports of services decreased $0.1 billion to $190.8 billion, primarily reflecting decreases in charges for the use of intellectual property, mostly licenses for the use of outcomes of research and development (such as patents and trade secrets), and in telecommunications, computer, and information services, mostly computer services. An increase in other business services, mostly professional and management consulting services, partly offset these decreases. Imports of services increased $12.6 billion to $141.0 billion, mostly reflecting increases in travel, primarily other personal travel, and in transport, primarily sea freight and air passenger transport.

Primary income

Receipts of primary income increased $17.9 billion to $281.9 billion, mainly reflecting increases in direct investment income, primarily earnings, and in portfolio investment income, mostly equity securities. Payments of primary income increased $8.6 billion to $233.7 billion, primarily reflecting an increase in portfolio investment income, mostly interest on long-term debt securities.

Secondary income

Receipts of secondary income increased $0.1 billion to $41.6 billion, reflecting an increase in general government transfers, mainly taxes on income and wealth. Payments of secondary income increased $8.0 billion to $79.6 billion, mainly reflecting an increase in general government transfers, mostly international cooperation.

Table B. Exports of Goods and Services and Income Receipts
[Millions of dollars, seasonally adjusted]
  2020 2021 Change 2021:Q2 to 2021:Q3
Q4 Q1 Q2 r Q3 p
Exports of goods and services and income receipts 851,907 895,258 933,130 955,936 22,806
Exports of goods 384,050 408,344 436,766 441,594 4,828
General merchandise 376,467 398,257 428,519 434,220 5,701
Foods, feeds, and beverages 38,922 40,667 40,445 37,015 −3,430
Industrial supplies and materials 119,483 134,595 152,815 158,794 5,979
Energy products 42,678 52,074 63,526 68,895 5,369
Of which: Petroleum and products 33,665 39,992 51,663 53,803 2,140
Nonenergy products 76,805 82,521 89,289 89,899 610
Capital goods except automotive 117,444 122,323 131,809 130,862 −947
Automotive vehicles, parts, and engines 38,372 37,395 34,856 34,364 −492
Consumer goods except food and automotive 48,781 48,256 52,847 57,610 4,763
Other general merchandise 13,464 15,021 15,747 15,575 −172
Net exports of goods under merchanting 276 253 254 316 62
Nonmonetary gold 7,307 9,833 7,993 7,057 −936
Exports of services1 174,745 181,461 190,879 190,829 −50
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. 2,820 2,946 2,980 3,008 28
Transport 13,301 14,338 15,899 15,935 36
Travel (for all purposes including education) 11,967 13,258 16,028 16,291 263
Business 2,229 2,459 2,846 3,259 413
Personal 9,738 10,800 13,181 13,032 −149
Construction 505 651 650 798 148
Insurance services 5,281 5,291 5,309 5,422 113
Financial services 37,944 39,420 40,445 40,375 −70
Charges for the use of intellectual property n.i.e. 30,343 30,092 31,355 29,524 −1,831
Telecommunications, computer, and information services 15,505 14,701 14,956 14,393 −563
Other business services 45,869 49,436 51,502 53,419 1,917
Personal, cultural, and recreational services 5,777 5,483 5,933 5,910 −23
Government goods and services n.i.e. 5,433 5,842 5,824 5,753 −71
Primary income receipts 252,040 262,922 263,988 281,908 17,920
Investment income 250,444 261,280 262,319 280,221 17,902
Direct investment income 141,436 150,871 149,710 159,608 9,898
Income on equity 137,130 146,940 145,867 155,796 9,929
Dividends and withdrawals 50,926 84,037 56,381 74,062 17,681
Reinvested earnings 86,204 62,903 89,486 81,734 −7,752
Interest 4,306 3,931 3,842 3,813 −29
Portfolio investment income 94,038 95,851 98,342 106,524 8,182
Income on equity and investment fund shares 62,513 62,311 64,876 71,258 6,382
Interest on debt securities 31,525 33,540 33,466 35,267 1,801
Other investment income 14,974 14,493 14,220 14,319 99
Reserve asset income −3 65 47 −231 −278
Compensation of employees 1,596 1,642 1,669 1,687 18
Secondary income (current transfer) receipts2 41,072 42,531 41,497 41,605 108
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]
  2020 2021 Change 2021:Q2 to 2021:Q3
Q4 Q1 Q2 r Q3 p
Imports of goods and services and income payments 1,026,986 1,084,681 1,131,449 1,170,710 39,261
Imports of goods 637,175 677,232 706,381 716,421 10,040
General merchandise 629,137 670,355 699,813 711,114 11,301
Foods, feeds, and beverages 40,104 41,284 46,263 47,522 1,259
Industrial supplies and materials 114,295 136,280 156,813 169,384 12,571
Energy products 34,917 46,785 56,518 63,216 6,698
Of which: Petroleum and products 31,241 42,689 52,208 57,673 5,465
Nonenergy products 79,378 89,495 100,295 106,168 5,873
Capital goods except automotive 173,646 183,798 190,683 192,905 2,222
Automotive vehicles, parts, and engines 96,590 90,642 87,214 83,619 −3,595
Consumer goods except food and automotive 177,787 190,923 190,302 186,963 −3,339
Other general merchandise 26,716 27,428 28,538 30,721 2,183
Nonmonetary gold 8,038 6,877 6,568 5,307 −1,261
Imports of services1 118,406 118,670 128,327 140,966 12,639
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. 1,562 1,945 1,991 1,842 −149
Transport 18,728 19,875 24,632 28,551 3,919
Travel (for all purposes including education) 7,559 7,891 11,995 17,670 5,675
Business 1,172 1,132 1,671 2,617 946
Personal 6,387 6,760 10,324 15,053 4,729
Construction 312 334 304 306 2
Insurance services 14,399 14,059 13,934 14,126 192
Financial services 10,869 10,497 10,642 11,026 384
Charges for the use of intellectual property n.i.e. 11,959 11,783 11,000 11,899 899
Telecommunications, computer, and information services 10,156 9,971 10,128 10,006 −122
Other business services 30,598 29,674 30,582 32,268 1,686
Personal, cultural, and recreational services 6,067 6,416 6,800 6,931 131
Government goods and services n.i.e. 6,197 6,226 6,318 6,341 23
Primary income payments 197,824 212,732 225,160 233,746 8,586
Investment income 194,211 208,898 221,344 229,597 8,253
Direct investment income 53,342 64,108 77,151 79,692 2,541
Portfolio investment income 122,822 127,727 127,413 131,833 4,420
Income on equity and investment fund shares 44,659 46,463 45,731 46,655 924
Interest on debt securities 78,163 81,264 81,682 85,178 3,496
Other investment income 18,048 17,063 16,779 18,072 1,293
Compensation of employees 3,613 3,834 3,817 4,149 332
Secondary income (current transfer) payments2 73,580 76,048 71,581 79,578 7,997
           
Supplemental detail on insurance transactions:          
Premiums paid 36,435 36,533 35,884 36,626 742
Losses recovered 25,145 25,266 25,549 29,435 3,886
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 receipts were $3.8 billion in the third quarter (table A). The transactions reflected receipts from foreign insurance companies for losses resulting from Hurricane Ida. For information on transactions associated with hurricanes and other disasters, see “How do losses recovered from foreign insurance companies following natural or man-made disasters affect foreign transactions, the current account balance, and net lending or net borrowing?

Net financial-account transactions were −$127.2 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 $494.1 billion (charts 5 and 6 and table D). Transactions increased portfolio investment assets, mainly debt securities, by $311.7 billion; reserve assets, primarily special drawing rights (SDRs), by $112.6 billion; and direct investment assets, mostly equity, by $98.2 billion. Transactions decreased other investment assets, mostly deposits, by $28.5 billion. The increase in SDRs reflects the U.S. share of the $650 billion SDR allocation approved by the Board of Governors of the International Monetary Fund (IMF). The SDR is an international reserve asset created by the IMF to supplement its member countries’ official reserves; it can be exchanged between members for currencies, such as the U.S. dollar, the euro, or the yen. The allocation in the third quarter was the largest in the history of the IMF.

Liabilities

Third-quarter transactions increased U.S. liabilities to foreign residents by $613.3 billion. Transactions increased other investment liabilities, mostly deposits and SDR allocations, by $318.0 billion; direct investment liabilities, mostly equity, by $149.1 billion; and portfolio investment liabilities, primarily equity, by $146.2 billion. The SDR allocation liability represents the long-term obligation of each IMF member country holding SDRs to all other members. In an SDR allocation, the incurrence of U.S. liabilities offsets the acquisition of U.S. assets so the SDR allocation has no impact on the net financial-account transactions.

Financial derivatives

Net transactions in financial derivatives were −$8.0 billion in the third 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]
  2020 2021 Change 2021:Q2 to 2021:Q3
Q4 Q1 Q2 r Q3 p
Net U.S. acquisition of financial assets excluding financial derivatives (net increase in assets / financial outflow (+)) 228,289 395,838 236,949 494,066 257,117
Direct investment assets 96,702 76,945 165,005 98,228 −66,777
Equity 86,913 76,921 123,078 86,798 −36,280
Equity other than reinvestment of earnings 709 14,019 33,591 5,064 −28,527
Reinvestment of earnings 86,204 62,903 89,486 81,734 −7,752
Debt instruments 9,789 24 41,927 11,431 −30,496
Portfolio investment assets 53,940 294,204 126,195 311,733 185,538
Equity and investment fund shares −42,526 83,024 121,169 119,635 −1,534
Debt securities 96,466 211,180 5,026 192,097 187,071
Short-term securities 29,440 39,856 23,031 20,635 −2,396
Long-term corporate securities 50,875 123,792 −14,936 129,979 144,915
Other long-term securities 16,151 47,532 −3,069 41,483 44,552
Other investment assets 75,209 26,788 −54,728 −28,498 26,230
Other equity 324 1,169 0 37 37
Currency and deposits −6,533 −1,588 −82,679 −25,245 57,434
Loans 77,929 23,323 31,031 −2,305 −33,336
Trade credit and advances 3,489 3,884 −3,081 −985 2,096
Reserve assets 2,438 −2,100 477 112,603 112,126
Monetary gold 0 0 0 0 0
Special drawing rights 7 8 4 112,838 112,834
Reserve position in the International Monetary Fund 2,454 −2,157 437 11 −426
Other reserve assets −23 50 36 −247 −283
Net U.S. incurrence of liabilities excluding financial derivatives (net increase in liabilities / financial inflow (+)) 502,122 574,400 445,166 613,299 168,133
Direct investment liabilities 101,824 70,558 85,858 149,122 63,264
Equity 82,922 72,192 87,221 111,316 24,095
Equity other than reinvestment of earnings 51,302 30,740 36,088 55,971 19,883
Reinvestment of earnings 31,620 41,453 51,134 55,345 4,211
Debt instruments 18,902 −1,635 −1,364 37,806 39,170
Portfolio investment liabilities 350,675 323,752 198,105 146,205 −51,900
Equity and investment fund shares 246,335 96,969 67,936 148,837 80,901
Debt securities 104,340 226,783 130,169 −2,632 −132,801
Short term 1,406 −44,402 −39,330 −10,231 29,099
Treasury bills and certificates 10,017 −60,815 −52,145 2,194 54,339
Federally sponsored agency securities −1,778 −3,419 −1,352 377 1,729
Other short-term securities −6,833 19,832 14,167 −12,802 −26,969
Long term 102,935 271,186 169,499 7,599 −161,900
Treasury bonds and notes 50,485 223,025 158,132 78,437 −79,695
Federally sponsored agency securities 11,801 −24,416 −12,749 −10,924 1,825
Corporate bonds and notes 40,629 70,063 20,678 −55,571 −76,249
Other 20 2,514 3,438 −4,343 −7,781
Other investment liabilities 49,623 180,090 161,204 317,971 156,767
Other equity n.a. n.a. n.a. n.a. n.a
Currency 29,051 10,092 12,650 7,321 −5,329
Deposits 33,304 83,801 45,406 170,770 125,364
Loans −18,784 81,318 100,168 25,931 −74,237
Trade credit and advances 6,052 4,878 2,980 1,115 −1,865
Special drawing rights allocations 0 0 0 112,834 112,834
p
Preliminary
r
Revised

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 second quarter have been updated to incorporate newly available and revised source data (table E).

Table E. Updates to the Second-Quarter 2021 International Transactions Aggregates
[Millions of dollars, seasonally adjusted]
  Preliminary Estimates Revised Estimates
Balance on current account −190,282 −198,319
Balance on goods −269,669 −269,614
Balance on services 61,242 62,552
Balance on primary income 49,098 38,827
Balance on secondary income (current transfers) −30,953 −30,084
Net lending or borrowing from financial-account transactions −287,341 −216,829
Net U.S. acquisition of financial assets 248,225 236,949
Net U.S. incurrence of liabilities 526,954 445,166
Financial derivatives other than reserves, net transactions −8,612 −8,612

Releases of new statistics on U.S. resident special purpose entities

With the release of the U.S. International Transactions Accounts (ITAs) on December 21, 2021, the Bureau of Economic Analysis introduced two new ITA tables—tables 4.6 and 6.3—that feature annual statistics on U.S. special purpose entities (SPEs), which are U.S. legal entities with little or no employment or physical presence. The increased prevalence of SPEs heightens the need for separate statistics on their activities for analysis and for improved interpretability of macroeconomic statistics. The new tables fulfill a commitment to the IMF Task Force on Special Purpose Entities to release statistics on SPEs by yearend 2021. ITA table 4.6 presents primary income on foreign direct investment in U.S. resident SPEs, and ITA table 6.3 presents financial transactions for direct investment in U.S. resident SPEs. For more information, see “New Statistics on U.S. Resident Special Purpose Entities in the International Transactions Accounts.”