U.S. International Transactions

Third Quarter 2020

By Rudy Telles Jr.  |  Volume 101, Number 1  |  January 22, 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 $17.2 billion, or 10.6 percent, to $178.5 billion in the third quarter of 2020 (chart 1 and table A). The revised second-quarter deficit was $161.4 billion.

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

The $17.2 billion widening of the current-account deficit in the third quarter mostly reflected an expanded deficit on goods that was partly offset by an expanded surplus on primary 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]
Series 2019 2020 Change 2020 Q2 to
2020 Q3
Q4 Q1 Q2 r Q3 p
Current account          
Exports of goods and services and income receipts (credits) 949,848 897,212 696,586 796,001 99,415
Exports of goods and services 632,469 605,552 450,730 521,981 71,251
Goods 411,390 403,533 288,726 357,135 68,409
Services 221,079 202,019 162,004 164,846 2,842
Primary income receipts 282,943 256,527 211,944 238,696 26,752
Secondary income (current transfer) receipts 34,435 35,134 33,912 35,324 1,412
Imports of goods and services and income payments (debits) 1,054,172 1,008,728 857,948 974,514 116,566
Imports of goods and services 762,228 732,028 609,417 710,388 100,971
Goods 613,887 595,281 508,271 602,701 94,430
Services 148,341 136,747 101,146 107,688 6,542
Primary income payments 220,985 204,491 178,710 190,588 11,878
Secondary income (current transfer) payments 70,959 72,209 69,821 73,537 3,716
Capital account          
Capital transfer receipts and other credits 6 19 20 356 336
Capital transfer payments and other debits 2,026 2,990 1,074 1,034 −40
Financial account          
Net U.S. acquisition of financial assets excluding financial derivatives (net increase in assets / financial outflow (+)) 55,067 830,858 −257,865 −73,048 184,817
Direct investment assets 59,180 −9,065 42,253 71,063 28,810
Portfolio investment assets 21,806 115,814 −947 142,166 143,113
Other investment assets −26,128 724,354 −304,131 −288,098 16,033
Reserve assets 210 −245 4,960 1,820 −3,140
Net U.S. incurrence of liabilities excluding financial derivatives (net increase in liabilities / financial inflow (+)) 83,479 952,306 −63,989 172,022 236,011
Direct investment liabilities 56,506 52,201 −651 70,530 71,181
Portfolio investment liabilities −53,160 −20,547 342,240 147,526 −194,714
Other investment liabilities 80,133 920,653 −405,578 −46,034 359,544
Financial derivatives other than reserves, net transactions −933 −21,611 −12,744 23,999 36,743
Statistical discrepancy          
Statistical discrepancy1 76,998 −28,572 −44,204 −41,880 2,324
Balances          
Balance on current account −104,324 −111,516 −161,362 −178,513 −17,151
Balance on goods and services −129,759 −126,476 −158,687 −188,408 −29,721
Balance on goods −202,497 −191,748 −219,545 −245,565 −26,020
Balance on services 72,738 65,272 60,858 57,158 −3,700
Balance on primary income 61,958 52,036 33,234 48,108 14,874
Balance on secondary income −36,524 −37,075 −35,909 −38,213 −2,304
Balance on capital account −2,019 −2,971 −1,054 −678 376
Net lending (+) or net borrowing (-) from current- and capital-account transactions2 −106,344 −114,487 −162,416 −179,191 −16,775
Net lending (+) or net borrowing (-) from financial-account transactions3 −29,345 −143,059 −206,620 −221,071 −14,451
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 increased $99.4 billion, to $796.0 billion, in the third quarter. Imports of goods and services from, and income paid to, foreign residents increased $116.6 billion, to $974.5 billion (charts 2 and 4 and tables A and C).

Chart 2. Current-Account Transactions

[Click chart to expand]

Trade in goods

Exports of goods increased $68.4 billion, to $357.1 billion, and imports of goods increased $94.4 billion, to $602.7 billion. The increases in both exports and imports reflected increases in all major categories, led by automotive vehicles, parts, and engines (mainly parts and engines) and passenger cars.

Trade in services

Exports of services increased $2.8 billion, to $164.8 billion, mainly reflecting an increase in charges for the use of intellectual property, mostly licenses for the use of outcomes of research and development, that was partly offset by a decrease in travel, primarily education-related travel. Imports of services increased $6.5 billion, to $107.7 billion, mainly reflecting increases in charges for the use of intellectual property, mostly licenses for the use of outcomes of research and development; in transport, primarily sea freight transport; and in travel, primarily other personal travel.

Primary income

Receipts of primary income increased $26.8 billion, to $238.7 billion, and payments of primary income increased $11.9 billion, to $190.6 billion. The increases in both receipts and payments mainly reflected increases in direct investment income, primarily earnings.

Secondary income

Receipts of secondary income increased $1.4 billion, to $35.3 billion, reflecting an increase in private transfers, mostly private sector fines and penalties, that was partly offset by a decrease in general government transfers, mainly government sector fines and penalties. Payments of secondary income increased $3.7 billion, to $73.5 billion, reflecting increases in private transfers, primarily private sector fines and penalties, and in general government transfers, mostly international cooperation.

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]
Series 2019 2020 Change 2020 Q2 to
2020 Q3
Q4 Q1 Q2 r Q3 p
Exports of goods and services and income receipts 949,848 897,212 696,586 796,001 99,415
Exports of goods 411,390 403,533 288,726 357,135 68,409
General merchandise 405,687 398,631 283,412 350,122 66,710
Foods, feeds, and beverages 32,151 32,787 31,157 34,345 3,188
Industrial supplies and materials 132,804 134,370 92,868 108,515 15,647
Energy products 59,010 59,009 31,065 39,267 8,202
Of which: Petroleum and products 50,844 51,076 24,941 32,963 8,022
Nonenergy products 73,794 75,361 61,803 69,248 7,445
Capital goods except automotive 135,521 131,854 99,109 111,754 12,645
Automotive vehicles, parts, and engines 39,756 37,832 15,539 36,876 21,337
Consumer goods except food and automotive 49,797 46,983 33,477 45,115 11,638
Other general merchandise 15,657 14,805 11,261 13,518 2,257
Net exports of goods under merchanting 119 151 169 146 −23
Nonmonetary gold 5,585 4,750 5,145 6,867 1,722
Exports of services1 221,079 202,019 162,004 164,846 2,842
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. 7,432 4,189 3,623 3,658 35
Transport 22,693 20,786 10,894 11,839 945
Travel (for all purposes including education) 48,219 38,982 12,903 11,099 −1,804
Business 9,368 7,183 1,649 2,021 372
Personal 38,852 31,799 11,255 9,078 −2,177
Construction 734 588 519 637 118
Insurance services 3,762 3,819 3,702 3,634 −68
Financial services 34,303 33,638 33,666 34,336 670
Charges for the use of intellectual property n.i.e. 29,993 28,319 26,877 29,967 3,090
Telecommunications, computer, and information services 14,306 13,437 13,673 13,496 −177
Other business services 47,736 47,422 46,635 45,755 −880
Personal, cultural, and recreational services 5,978 4,966 4,134 4,456 322
Government goods and services n.i.e. 5,924 5,873 5,377 5,967 590
Primary income receipts 282,943 256,527 211,944 238,696 26,752
Investment income 281,254 254,846 210,476 237,213 26,737
Direct investment income 146,363 119,918 104,443 130,689 26,246
Income on equity 140,194 114,184 99,367 125,833 26,466
Dividends and withdrawals 83,643 112,879 74,664 67,021 −7,643
Reinvested earnings 56,551 1,305 24,703 58,812 34,109
Interest 6,168 5,734 5,076 4,856 −220
Portfolio investment income 107,068 109,726 89,026 91,773 2,747
Income on equity and investment fund shares 72,083 74,988 58,376 60,174 1,798
Interest on debt securities 34,985 34,737 30,650 31,599 949
Other investment income 27,672 25,054 16,941 14,707 −2,234
Reserve asset income 151 149 65 44 −21
Compensation of employees 1,689 1,680 1,468 1,483 15
Secondary income (current transfer) receipts2 34,435 35,134 33,912 35,324 1,412
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]
Series 2019 2020 Change 2020 Q2 to
2020 Q3
Q4 Q1 Q2 r Q3 p
Imports of goods and services and income payments 1,054,172 1,008,728 857,948 974,514 116,566
Imports of goods 613,887 595,281 508,271 602,701 94,430
General merchandise 609,144 589,085 475,229 588,310 113,081
Foods, feeds, and beverages 37,398 38,673 36,836 40,062 3,226
Industrial supplies and materials 126,630 121,706 89,932 103,327 13,395
Energy products 53,410 48,332 23,169 31,188 8,019
Of which: Petroleum and products 49,775 45,598 20,507 28,297 7,790
Nonenergy products 73,220 73,374 66,763 72,139 5,376
Capital goods except automotive 168,127 161,739 146,022 165,148 19,126
Automotive vehicles, parts, and engines 89,707 87,846 41,028 85,781 44,753
Consumer goods except food and automotive 157,381 150,663 140,127 167,787 27,660
Other general merchandise 29,901 28,458 21,285 26,206 4,921
Nonmonetary gold 4,743 6,196 33,042 14,390 −18,652
Imports of services1 148,341 136,747 101,146 107,688 6,542
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. 1,949 1,561 1,343 1,379 36
Transport 26,570 23,305 13,628 15,893 2,265
Travel (for all purposes including education) 33,717 24,865 2,462 4,389 1,927
Business 4,609 3,065 295 642 347
Personal 29,108 21,800 2,167 3,748 1,581
Construction 321 315 246 196 −50
Insurance services 13,954 14,104 14,737 15,537 800
Financial services 10,010 10,058 9,705 9,777 72
Charges for the use of intellectual property n.i.e. 10,587 11,194 9,035 11,659 2,624
Telecommunications, computer, and information services 11,088 9,907 9,316 8,562 −754
Other business services 28,550 29,671 28,665 27,970 −695
Personal, cultural, and recreational services 5,483 5,666 5,868 6,141 273
Government goods and services n.i.e. 6,113 6,100 6,140 6,185 45
Primary income payments 220,985 204,491 178,710 190,588 11,878
Investment income 216,145 199,834 175,429 187,028 11,599
Direct investment income 61,104 43,395 33,371 47,408 14,037
Portfolio investment income 124,328 127,424 120,245 121,731 1,486
Income on equity and investment fund shares 41,897 45,336 41,315 42,080 765
Interest on debt securities 82,431 82,088 78,929 79,650 721
Other investment income 30,713 29,014 21,813 17,890 −3,923
Compensation of employees 4,840 4,656 3,282 3,560 278
Secondary income (current transfer) payments2 70,959 72,209 69,821 73,537 3,716
           
Supplemental detail on insurance transactions:          
Premiums paid 33,042 32,738 33,798 35,277 1,479
Losses recovered 19,351 19,115 18,892 18,938 46
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 receipts increased $0.3 billion, to $0.4 billion, in the third quarter, reflecting the U.S. Department of State’s sale of a property in Hong Kong (table A).

Net financial-account transactions were −$221.1 billion in the third quarter, reflecting net U.S. borrowing from foreign residents.

Financial assets

Third-quarter transactions decreased U.S. residents’ foreign financial assets by $73.0 billion. Transactions decreased other investment assets, mostly currency and deposits, by $288.1 billion. Transactions in deposits included a net withdrawal by the U.S. Federal Reserve of $203.0 billion from deposits abroad related to the ending of currency swaps. Transactions increased direct investment assets, mostly equity, by $71.1 billion; portfolio investment assets, mostly equity securities, by $142.2 billion; and reserve assets by $1.8 billion.

Liabilities

Third-quarter transactions increased U.S. liabilities to foreign residents by $172.0 billion. Transactions increased direct investment liabilities, both equity and debt, by $70.5 billion, and portfolio investment liabilities, mostly equity securities, by $147.5 billion. Transactions decreased other investment liabilities, mostly loans, by $46.0 billion.

Financial derivatives

Net transactions in financial derivatives were $24.0 billion in the third quarter, reflecting net lending to 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]
Series 2019 2020 Change 2020 Q2 to
2020 Q3
Q4 Q1 Q2 r Q3 p
Net U.S. acquisition of financial assets excluding financial derivatives (net increase in assets / financial outflow (+)) 55,067 830,858 −257,865 −73,048 184,817
Direct investment assets 59,180 −9,065 42,253 71,063 28,810
Equity 55,296 15,620 50,946 57,243 6,297
Equity other than reinvestment of earnings −1,255 14,316 26,243 −1,569 −27,812
Reinvestment of earnings 56,551 1,305 24,703 58,812 34,109
Debt instruments 3,884 −24,685 −8,693 13,820 22,513
Portfolio investment assets 21,806 115,814 −947 142,166 143,113
Equity and investment fund shares −99,715 279,965 −67,540 92,676 160,216
Debt securities 121,521 −164,151 66,593 49,490 −17,103
Short-term securities 66,150 −73,206 21,807 20,320 −1,487
Long-term corporate securities 35,418 −69,619 34,197 22,116 −12,081
Other long-term securities 19,953 −21,326 10,589 7,054 −3,535
Other investment assets −26,128 724,354 −304,131 −288,098 16,033
Other equity 0 1,298 10 215 205
Currency and deposits 66,347 539,992 −312,539 −203,623 108,916
Loans −91,595 187,829 8,485 −84,461 −92,946
Trade credit and advances −879 −4,765 −87 −229 −142
Reserve assets 210 −245 4,960 1,820 −3,140
Monetary gold 0 0 0 0 0
Special drawing rights 57 49 20 5 −15
Reserve position in the International Monetary Fund 155 −327 4,902 1,785 −3,117
Other reserve assets −2 33 38 29 −9
Net U.S. incurrence of liabilities excluding financial derivatives (net increase in liabilities / financial inflow (+)) 83,479 952,306 −63,989 172,022 236,011
Direct investment liabilities 56,506 52,201 −651 70,530 71,181
Equity 78,529 44,718 29,459 37,739 8,280
Equity other than reinvestment of earnings 46,367 27,540 20,290 10,517 −9,773
Reinvestment of earnings 32,161 17,178 9,169 27,222 18,053
Debt instruments −22,023 7,482 −30,110 32,792 62,902
Portfolio investment liabilities −53,160 −20,547 342,240 147,526 −194,714
Equity and investment fund shares −72,736 263,713 64,646 146,408 81,762
Debt securities 19,576 −284,261 277,595 1,118 −276,477
Short term −48,444 −10,748 343,807 −47,475 −391,282
Treasury bills and certificates −43,855 13,452 311,348 −23,560 −334,908
Federally sponsored agency securities 5,493 −4,708 −1,634 −878 756
Other short-term securities −10,082 −19,492 34,093 −23,037 −57,130
Long term 68,020 −273,513 −66,212 48,592 114,804
Treasury bonds and notes 19,117 −300,497 −201,698 65,620 267,318
Federally sponsored agency securities 5,067 56,721 −57,017 −49,102 7,915
Corporate bonds and notes 43,267 −27,992 184,769 31,825 −152,944
Other 569 −1,745 7,734 249 −7,485
Other investment liabilities 80,133 920,653 −405,578 −46,034 359,544
Other equity n.a. n.a. n.a. n.a. n.a
Currency 17,579 26,014 29,399 36,861 7,462
Deposits 3,075 481,772 −271,073 −40,939 230,134
Loans 56,253 409,408 −167,278 −44,387 122,891
Trade credit and advances 3,226 3,459 3,374 2,431 −943
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 have been updated to incorporate newly available and revised source data (table E).

Table E. Updates to the Second-Quarter 2020 International Transactions Aggregates
[Millions of dollars, seasonally adjusted]
Series Preliminary Estimates Revised Estimates
Balance on current account −170,541 −161,362
Balance on goods −219,338 −219,545
Balance on services 54,440 60,858
Balance on primary income 29,213 33,234
Balance on secondary income (current transfers) −34,856 −35,909
Net lending or borrowing from financial-account transactions −82,569 −206,620
Net U.S. acquisition of financial assets −147,602 −257,865
Net U.S. incurrence of liabilities −4,777 −63,989
Financial derivatives other than reserves, net transactions 60,256 −12,744