U.S. International Transactions

First Quarter 2020

By Molly Garber  |  Volume 100, Number 7  |  July 21, 2020

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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 $0.1 billion, or 0.1 percent, to $104.2 billion in the first quarter of 2020 (chart 1 and table A). The revised fourth-quarter deficit was $104.3 billion.

The first-quarter deficit was 1.9 percent of current-dollar gross domestic product, up less than 0.1 percentage point from the fourth quarter.

The $0.1 billion narrowing of the current-account deficit in the first quarter mainly reflected a reduced deficit on goods that was largely offset by a reduced surplus on primary income and an expanded deficit on secondary income.

Chart 1. U.S. Current-Account Balance and Its Components

[Click chart to expand]

Table A. U.S. International Transactions
[Millions of dollars, seasonally adjusted]
  2019 2020 Change 2019:IV to 2020:I
II r III r IV r I p
Current account          
Exports of goods and services and income receipts (credits) 953,927 954,446 949,848 902,303 −47,545
Exports of goods and services 631,394 630,189 632,469 612,382 −20,087
Goods 411,069 410,930 411,390 402,960 −8,430
Services 220,326 219,259 221,079 209,422 −11,657
Primary income receipts 287,535 286,761 282,943 255,139 −27,804
Secondary income (current transfer) receipts 34,997 37,496 34,435 34,781 346
Imports of goods and services and income payments (debits) 1,081,619 1,076,040 1,054,172 1,006,507 −47,665
Imports of goods and services 783,605 779,847 762,228 731,437 −30,791
Goods 635,641 632,059 613,887 595,291 −18,596
Services 147,964 147,788 148,341 136,146 −12,195
Primary income payments 228,069 225,140 220,985 202,652 −18,333
Secondary income (current transfer) payments 69,945 71,053 70,959 72,419 1,460
Capital account          
Capital transfer receipts and other credits 4 15 6 6 0
Capital transfer payments and other debits 852 850 2,026 2,968 942
Financial account          
Net U.S. acquisition of financial assets excluding financial derivatives (net increase in assets / financial outflow (+)) 158,966 142,221 55,067 722,712 667,645
Direct investment assets 115,561 25,574 59,180 −36,326 −95,506
Portfolio investment assets 45,025 20,460 21,806 144,705 122,899
Other investment assets −3,980 94,305 −26,128 614,578 640,706
Reserve assets 2,359 1,882 210 −245 −455
Net U.S. incurrence of liabilities excluding financial derivatives (net increase in liabilities / financial inflow (+)) 317,227 238,964 83,479 901,987 818,508
Direct investment liabilities 99,461 78,119 56,506 47,790 −8,716
Portfolio investment liabilities 146,049 105,660 −53,160 21,312 74,472
Other investment liabilities 71,717 55,185 80,133 832,885 752,752
Financial derivatives other than reserves, net transactions −9,642 −6,382 −933 −21,830 −20,897
Statistical discrepancy          
Statistical discrepancy1 −39,364 19,303 76,998 −93,939 −170,937
Balances          
Balance on current account −127,691 −121,594 −104,324 −104,204 120
Balance on goods and services −152,210 −149,658 −129,759 −119,055 10,704
Balance on goods −224,572 −221,129 −202,497 −192,332 10,165
Balance on services 72,362 71,471 72,738 73,277 539
Balance on primary income 59,467 61,621 61,958 52,488 −9,470
Balance on secondary income −34,948 −33,556 −36,524 −37,637 −1,113
Balance on capital account −848 −835 −2,019 −2,962 −943
Net lending (+) or net borrowing (−) from current- and capital-account transactions2 −128,539 −122,429 −106,344 −107,166 −822
Net lending (+) or net borrowing (−) from financial-account transactions3 −167,903 −103,125 −29,345 −201,105 −171,760
p
Preliminary
r
Revised
  1. The statistical discrepancy is the difference between net acquisition of financial assets and net incurrence of liabilities in the financial account (including financial derivatives) less the difference between total credits and total debits recorded in the current and capital accounts.
  2. Sum of current- and capital-account balances.
  3. Sum of net U.S. acquisition of financial assets and net transactions in financial derivatives less net U.S. incurrence of liabilities.

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 decreased $47.5 billion to $902.3 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 decreased $47.7 billion to $1.01 trillion (charts 2 and 4 and tables A and C).

Chart 2. Current-Account Transactions

[Click chart to expand]

Trade in goods

Exports of goods decreased $8.4 billion to $403.0 billion, mostly reflecting decreases in capital goods, mainly civilian aircraft, and in consumer goods, mainly jewelry and collectibles. Imports of goods decreased $18.6 billion to $595.3 billion, mostly reflecting decreases in consumer goods, mainly cell phones and other household goods, and in capital goods, mainly computers, telecommunications equipment, and other industrial machinery.

Trade in services

Exports of services decreased $11.7 billion to $209.4 billion, and imports of services decreased $12.2 billion to $136.1 billion. The decreases in both exports and imports mainly reflected decreases in travel, primarily other personal travel, and in transport, primarily air passenger transport.

Primary income

Receipts of primary income decreased $27.8 billion to $255.1 billion, and payments of primary income decreased $18.3 billion to $202.7 billion. The decreases in both receipts and payments mostly reflected decreases in direct investment income, mainly earnings.

Secondary income

Receipts of secondary income increased $0.3 billion to $34.8 billion, and payments of secondary income increased $1.5 billion to $72.4 billion. The increases in both receipts and payments mainly reflected increases in private transfers, primarily private sector fines and penalties.

Chart 3. Percent Change in Exports of Goods and Services and Income Receipts

[Click chart to expand]

Chart 4. Percent Change in Imports of Goods and Services and Income Payments

[Click chart to expand]

Table B. Exports of Goods and Services and Income Receipts
[Millions of dollars, seasonally adjusted]
  2019 2020 Change 2019:IV to 2020:I
II r III r IV r I p
Exports of goods and services and income receipts 953,927 954,446 949,848 902,303 −47,545
Exports of goods 411,069 410,930 411,390 402,960 −8,430
General merchandise 406,812 405,848 405,687 398,096 −7,591
Foods, feeds, and beverages 33,400 33,172 32,151 32,787 636
Industrial supplies and materials 132,140 129,780 132,804 133,847 1,043
Energy products 56,394 55,291 59,010 58,486 −524
Of which: Petroleum and products 48,979 47,373 50,844 50,553 −291
Nonenergy products 75,746 74,489 73,794 75,361 1,567
Capital goods except automotive 135,500 135,007 135,521 131,854 −3,667
Automotive vehicles, parts, and engines 40,440 41,324 39,756 37,832 −1,924
Consumer goods except food and automotive 51,200 51,462 49,797 46,983 −2,814
Other general merchandise 14,133 15,102 15,657 14,793 −864
Net exports of goods under merchanting 85 139 119 114 −5
Nonmonetary gold 4,172 4,943 5,585 4,750 −835
Exports of services1 220,326 219,259 221,079 209,422 −11,657
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. 6,651 7,088 7,432 7,428 −4
Transport 22,930 22,333 22,693 20,295 −2,398
Travel (for all purposes including education) 48,858 47,721 48,219 38,996 −9,223
Business 9,466 9,107 9,368 7,330 −2,038
Personal 39,392 38,613 38,852 31,666 −7,186
Construction 761 849 734 705 −29
Insurance services 4,036 4,260 3,762 3,593 −169
Financial services 34,429 33,483 34,303 33,505 −798
Charges for the use of intellectual property n.i.e. 29,223 29,237 29,993 29,792 −201
Telecommunications, computer, and information services 14,328 14,267 14,306 14,825 519
Other business services 47,654 48,187 47,736 48,219 483
Personal, cultural, and recreational services 5,911 5,876 5,978 5,965 −13
Government goods and services n.i.e. 5,546 5,959 5,924 6,100 176
Primary income receipts 287,535 286,761 282,943 255,139 −27,804
Investment income 285,856 285,080 281,254 253,462 −27,792
Direct investment income 145,837 144,810 146,363 120,607 −25,756
Income on equity 139,282 138,192 140,194 114,799 −25,395
Dividends and withdrawals 103,480 95,327 83,643 124,218 40,575
Reinvested earnings 35,802 42,865 56,551 −9,419 −65,970
Interest 6,555 6,618 6,168 5,809 −359
Portfolio investment income 107,362 108,247 107,068 109,664 2,596
Income on equity and investment fund shares 72,633 73,190 72,083 74,911 2,828
Interest on debt securities 34,730 35,057 34,985 34,753 −232
Other investment income 32,409 31,780 27,672 23,042 −4,630
Reserve asset income 248 243 151 149 −2
Compensation of employees 1,679 1,682 1,689 1,678 −11
Secondary income (current transfer) receipts2 34,997 37,496 34,435 34,781 346
p
Preliminary
r
Revised
n.a.
Not available
n.i.e.
Not included elsewhere
  1. See also International Services table 2.1.
  2. Secondary income (current transfer) receipts include U.S. government and private transfers, such as fines and penalties, withholding taxes, insurance-related transfers, and other current transfers.

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]
  2019 2020 Change 2019:IV to 2020:I
II r III r IV r I p
Imports of goods and services and income payments 1,081,619 1,076,040 1,054,172 1,006,507 −47,665
Imports of goods 635,641 632,059 613,887 595,291 −18,596
General merchandise 633,703 628,870 609,144 589,096 −20,048
Foods, feeds, and beverages 38,349 38,328 37,398 38,673 1,275
Industrial supplies and materials 135,439 129,899 126,630 121,677 −4,953
Energy products 59,727 54,163 53,410 48,302 −5,108
Of which: Petroleum and products 56,283 50,903 49,775 45,565 −4,210
Nonenergy products 75,712 75,736 73,220 73,375 155
Capital goods except automotive 170,460 169,509 168,127 161,779 −6,348
Automotive vehicles, parts, and engines 96,200 95,356 89,707 87,846 −1,861
Consumer goods except food and automotive 165,095 167,021 157,381 150,663 −6,718
Other general merchandise 28,159 28,757 29,901 28,458 −1,443
Nonmonetary gold 1,938 3,189 4,743 6,196 1,453
Imports of services1 147,964 147,788 148,341 136,146 −12,195
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. 1,963 1,941 1,949 1,924 −25
Transport 26,892 26,668 26,570 22,720 −3,850
Travel (for all purposes including education) 34,668 33,151 33,717 24,853 −8,864
Business 4,893 4,685 4,609 3,140 −1,469
Personal 29,775 28,466 29,108 21,714 −7,394
Construction 327 330 321 321 0
Insurance services 12,880 13,403 13,954 14,418 464
Financial services 10,206 10,157 10,010 10,143 133
Charges for the use of intellectual property n.i.e. 10,448 10,631 10,587 9,982 −605
Telecommunications, computer, and information services 11,029 10,982 11,088 11,133 45
Other business services 28,310 29,171 28,550 28,889 339
Personal, cultural, and recreational services 5,278 5,249 5,483 5,649 166
Government goods and services n.i.e. 5,962 6,105 6,113 6,114 1
Primary income payments 228,069 225,140 220,985 202,652 −18,333
Investment income 223,413 220,430 216,145 198,001 −18,144
Direct investment income 63,876 60,941 61,104 46,249 −14,855
Portfolio investment income 123,759 124,526 124,328 124,926 598
Income on equity and investment fund shares 42,610 42,401 41,897 45,334 3,437
Interest on debt securities 81,149 82,125 82,431 79,592 −2,839
Other investment income 35,778 34,963 30,713 26,827 −3,886
Compensation of employees 4,656 4,711 4,840 4,651 −189
Secondary income (current transfer) payments2 69,945 71,053 70,959 72,419 1,460
           
Supplemental detail on insurance transactions:          
Premiums paid 32,167 32,787 33,042 33,351 309
Losses recovered 18,996 19,075 19,351 19,163 −188
p
Preliminary
r
Revised
n.a.
Not available
n.i.e.
Not included elsewhere
  1. See also International Services table 2.1.
  2. Secondary income (current transfer) payments include U.S. government and private transfers, such as U.S. government grants and pensions, fines and penalties, withholding taxes, personal transfers (remittances), insurance-related transfers, and other current transfers.

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 $0.9 billion to $3.0 billion in the first quarter, primarily reflecting an increase in investment grants (table A).

Net financial-account transactions were −$201.1 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 $722.7 billion (charts 5 and 6 and table D). Transactions increased portfolio investment assets by $144.7 billion, resulting from large and partly offsetting transactions in equity securities and debt securities, and other investment assets, mostly currency and deposits, by $614.6 billion. Transactions in deposits included $353.9 billion in foreign currency acquired by the Federal Reserve System from central bank liquidity swaps with foreign central banks. Transactions decreased direct investment assets, mostly debt instruments, by $36.3 billion, and reserve assets by $0.2 billion.

Liabilities

First-quarter transactions increased U.S. liabilities to foreign residents by $902.0 billion. Transactions increased direct investment liabilities, mainly equity, by $47.8 billion; portfolio investment liabilities by $21.3 billion, resulting from large and mostly offsetting transactions in equity securities and debt securities; and other investment liabilities, mostly currency and deposits and loans, by $832.9 billion. Transactions in deposits included $387.3 billion in interbank deposits received by the U.S. branches of foreign banks from affiliated foreign banks. These were mainly the U.S. dollars that foreign central banks obtained through the swaps described in the assets section above, which they then lent to foreign banks.

Financial derivatives

Net transactions in financial derivatives were −$21.8 billion in the first quarter, reflecting net borrowing from foreign residents.

Chart 5. Acquisition of Financial Assets and Incurrence of Liabilities Excluding Financial Derivatives

[Click chart to expand]

Chart 6. Transactions in Financial Assets and Liabilities Excluding Financial Derivatives

[Click chart to expand]

Table D. Net U.S. Acquisition of Financial Assets and Net U.S. Incurrence of Liabilities
[Millions of dollars, seasonally adjusted]
  2019 2020 Change 2019:IV to 2020:I
II r III r IV r I p
Net U.S. acquisition of financial assets excluding financial derivatives (net increase in assets / financial outflow (+)) 158,966 142,221 55,067 722,712 667,645
Direct investment assets 115,561 25,574 59,180 −36,326 −95,506
Equity 43,942 45,886 55,296 −3,804 −59,100
Equity other than reinvestment of earnings 8,140 3,021 −1,255 5,615 6,870
Reinvestment of earnings 35,802 42,865 56,551 −9,419 −65,970
Debt instruments 71,619 −20,312 3,884 −32,522 −36,406
Portfolio investment assets 45,025 20,460 21,806 144,705 122,899
Equity and investment fund shares −14,209 −56,839 −99,715 306,370 406,085
Debt securities 59,234 77,299 121,521 −161,665 −283,186
Short-term securities 23,399 61,443 66,150 −62,295 −128,445
Long-term corporate securities 24,996 7,841 35,418 −76,131 −111,549
Other long-term securities 10,839 8,015 19,953 −23,239 −43,192
Other investment assets −3,980 94,305 −26,128 614,578 640,706
Other equity 1,349 18 0 1,298 1,298
Currency and deposits 37,028 16,306 66,347 439,758 373,411
Loans −41,481 73,336 −91,595 178,144 269,739
Trade credit and advances −875 4,645 −879 −4,622 −3,743
Reserve assets 2,359 1,882 210 −245 −455
Monetary gold 0 0 0 0 0
Special drawing rights 60 63 57 49 −8
Reserve position in the International Monetary Fund 2,248 1,754 155 −327 −482
Other reserve assets 51 64 −2 33 35
Net U.S. incurrence of liabilities excluding financial derivatives (net increase in liabilities / financial inflow (+)) 317,227 238,964 83,479 901,987 818,508
Direct investment liabilities 99,461 78,119 56,506 47,790 −8,716
Equity 72,720 53,158 78,529 57,521 −21,008
Equity other than reinvestment of earnings 32,858 17,832 46,367 35,717 −10,650
Reinvestment of earnings 39,861 35,326 32,161 21,803 −10,358
Debt instruments 26,742 24,961 −22,023 −9,730 12,293
Portfolio investment liabilities 146,049 105,660 −53,160 21,312 74,472
Equity and investment fund shares 86,874 −42,481 −72,736 270,997 343,733
Debt securities 59,174 148,141 19,576 −249,685 −269,261
Short term −71,238 60,400 −48,444 −10,669 37,775
Treasury bills and certificates −57,630 42,275 −43,855 13,391 57,246
Federally sponsored agency securities −73 −748 5,493 −4,708 −10,201
Other short-term securities −13,535 18,873 −10,082 −19,352 −9,270
Long term 130,413 87,741 68,020 −239,015 −307,035
Treasury bonds and notes 93,996 32,139 19,117 −275,707 −294,824
Federally sponsored agency securities 20,390 10,507 5,067 54,628 49,561
Corporate bonds and notes 18,204 44,514 43,267 −16,560 −59,827
Other −2,177 581 569 −1,376 −1,945
Other investment liabilities 71,717 55,185 80,133 832,885 752,752
Other equity n.a. n.a. n.a. n.a. n.a
Currency 9,356 19,110 17,579 26,014 8,435
Deposits 104,374 74,616 3,075 480,067 476,992
Loans −42,741 −37,372 56,253 322,996 266,743
Trade credit and advances 729 −1,169 3,226 3,808 582
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 1999 through the fourth quarter of 2019 have been updated to incorporate newly available and revised source data, improved estimation methodologies, updated seasonal adjustments, and changes in classifications and definitions (table E). In addition, table presentations for the International Transactions Accounts have been expanded to provide additional detail.

For more information, see Rudy Telles Jr., Nick Martinez, and Ted Peck, “Annual Update of the International Transactions Accounts,” in this issue of the Survey of Current Business.

Table E. Updates to the Fourth-Quarter 2019 International Transactions Aggregates
[Millions of dollars, seasonally adjusted]
  Preliminary Estimates Revised Estimates
Balance on current account −109,822 −104,324
Balance on goods −202,784 −202,497
Balance on services 62,930 72,738
Balance on primary income 67,283 61,958
Balance on secondary income (current transfers) −37,251 −36,524
Net lending or borrowing from financial-account transactions −71,790 −29,345
Net U.S. acquisition of financial assets 998 55,067
Net U.S. incurrence of liabilities 71,855 83,479
Financial derivatives other than reserves, net transactions −933 −933