A Look at the U.S. International Transactions

Second Quarter of 2023

By Elliot Berg  |  October 11, 2023

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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 $2.4 billion, or 1.1 percent, to $212.1 billion in the second quarter of 2023 (chart 1 and table A). The revised first-quarter deficit was $214.5 billion.

The second-quarter deficit was 3.2 percent of current-dollar gross domestic product, up less than 0.1 percent from the first quarter.

The $2.4 billion narrowing of the current-account deficit in the second quarter primarily reflected expanded surpluses on services and on primary income that were mostly offset by an expanded deficit on goods.

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

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Table A. U.S. International Transactions
[Millions of dollars, seasonally adjusted]
Series 2022 2023 Change 2023:Q1 to 2023:Q2
Q3 Q4 Q1r Q2p
Current account          
Exports of goods and services and income receipts (credits) 1,140,187 1,138,053 1,153,162 1,145,319 −7,843
Exports of goods and services 782,107 758,561 769,219 744,901 −24,318
Goods 546,789 517,725 526,548 497,580 −28,968
Services 235,318 240,836 242,671 247,321 4,650
Primary income receipts 312,696 326,508 339,004 354,525 15,521
Secondary income (current transfer) receipts 45,384 52,985 44,939 45,893 954
Imports of goods and services and income payments (debits) 1,362,945 1,354,207 1,367,634 1,357,423 −10,211
Imports of goods and services 992,820 972,093 971,017 948,414 −22,603
Goods 813,966 791,865 789,815 772,752 −17,063
Services 178,855 180,228 181,201 175,662 −5,539
Primary income payments 273,204 288,414 307,558 319,521 11,963
Secondary income (current transfer) payments 96,920 93,700 89,059 89,488 429
Capital account          
Capital transfer receipts and other credits 8,327 23 44 7 −37
Capital transfer payments and other debits 4,169 3,444 5,957 2,757 −3,200
Financial account          
Net U.S. acquisition of financial assets excluding financial derivatives (net increase in assets / financial outflow (+)) 336,063 −260,318 208,346 238,206 29,860
Direct investment assets 74,788 105,743 108,734 88,444 −20,290
Portfolio investment assets 271,824 −330,802 8,109 40,295 32,186
Other investment assets −11,346 −38,162 90,725 109,195 18,470
Reserve assets 797 2,903 778 272 −506
Net U.S. incurrence of liabilities excluding financial derivatives (net increase in liabilities / financial inflow (+)) 518,520 −80,707 556,677 342,471 −214,206
Direct investment liabilities 121,427 66,847 112,094 100,480 −11,614
Portfolio investment liabilities 262,475 −101,060 299,510 387,142 87,632
Other investment liabilities 134,618 −46,494 145,073 −145,151 −290,224
Financial derivatives other than reserves, net transactions −33,940 −6,949 −1,727 −4,741 −3,014
Statistical discrepancy          
Statistical discrepancy1 2,203 33,015 −129,673 105,848 235,521
Balances          
Balance on current account −222,757 −216,154 −214,472 −212,104 2,368
Balance on goods and services −210,713 −213,532 −201,798 −203,514 −1,716
Balance on goods −267,176 −274,140 −263,268 −275,173 −11,905
Balance on services 56,463 60,608 61,470 71,659 10,189
Balance on primary income 39,492 38,094 31,446 35,004 3,558
Balance on secondary income −51,536 −40,716 −44,120 −43,595 525
Balance on capital account 4,158 −3,421 −5,913 −2,749 3,164
Net lending (+) or net borrowing (-) from current- and capital-account transactions2 −218,599 −219,575 −220,385 −214,854 5,531
Net lending (+) or net borrowing (-) from financial-account transactions3 −216,396 −186,560 −350,058 −109,006 241,052
p
Preliminary
r
Revised

Table Footnotes

  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 table 1.2 of the International Transactions Accounts Interactive Data Application on the BEA website.
U.S. Bureau of Economic Analysis

Exports of goods and services to, and income received from, foreign residents decreased $7.8 billion to $1.15 trillion 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 decreased $10.2 billion to $1.36 trillion (charts 2 and 4 and tables A and C).1

Chart 2. Current-Account Transactions

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Trade in goods

Exports of goods decreased $29.0 billion to $497.6 billion, and imports of goods decreased $17.1 billion to $772.8 billion. The decreases in both exports and imports mostly reflected a decrease in industrial supplies and materials, primarily petroleum and products.

Trade in services

Exports of services increased $4.7 billion to $247.3 billion, reflecting increases in travel, mainly other personal travel, and in other business services, mostly professional and management consulting services. Imports of services decreased $5.5 billion to $175.7 billion, reflecting decreases in transport, mostly sea freight transport, in other business services, mostly technical, trade-related, and other business services, and in travel, mainly other personal travel.

Primary income

Receipts of primary income increased $15.5 billion to $354.5 billion, and payments of primary income increased $12.0 billion to $319.5 billion. The increases in both receipts and payments reflected increases in nearly all major components, led by other investment income. The increase in other investment income, primarily interest on loans and deposits, was mainly due to higher short-term interest rates amid tightening of U.S. and foreign monetary policy.

Secondary income

Receipts of secondary income increased $1.0 billion to $45.9 billion, reflecting an increase in general government transfers, mostly fines and penalties. Payments of secondary income increased $0.4 billion to $89.5 billion, reflecting an increase in private transfers, mostly insurance-related transfers.

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

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

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Table B. Exports of Goods and Services and Income Receipts
[Millions of dollars, seasonally adjusted]
Series 2022 2023 Change 2023:Q1
to 2023:Q2
Q3 Q4 Q1r Q2p
Exports of goods and services and income receipts 1,140,187 1,138,053 1,153,162 1,145,319 −7,843
Exports of goods 546,789 517,725 526,548 497,580 −28,968
General merchandise 530,917 507,683 518,454 488,710 −29,744
Foods, feeds, and beverages 44,791 42,036 44,332 39,161 −5,171
Industrial supplies and materials 212,791 196,470 189,213 170,660 −18,553
Energy products 112,908 100,789 95,512 82,154 −13,358
Of which: Petroleum and products 86,404 79,391 76,829 66,266 −10,563
Nonenergy products 99,883 95,681 93,701 88,506 −5,195
Capital goods except automotive 146,369 146,859 148,563 148,079 −484
Automotive vehicles, parts, and engines 41,063 41,969 43,487 44,581 1,094
Consumer goods except food and automotive 63,001 59,998 68,188 63,430 −4,758
Other general merchandise 22,903 20,350 24,671 22,799 −1,872
Net exports of goods under merchanting 308 232 192 252 60
Nonmonetary gold 15,564 9,810 7,902 8,618 716
Exports of services1 235,318 240,836 242,671 247,321 4,650
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. 3,753 3,867 3,654 3,691 37
Transport 23,446 23,599 24,132 24,948 816
Travel (for all purposes including education) 36,511 38,932 39,686 42,308 2,622
Business 7,479 8,057 8,096 8,938 842
Personal 29,032 30,875 31,590 33,371 1,781
Construction 409 359 261 202 −59
Insurance services 5,821 5,861 5,952 5,961 9
Financial services 42,116 41,179 43,315 42,758 −557
Charges for the use of intellectual property n.i.e. 31,328 30,058 31,904 30,922 −982
Telecommunications, computer, and information services 16,885 17,398 17,197 17,388 191
Other business services 61,361 64,487 61,440 63,622 2,182
Personal, cultural, and recreational services 6,598 6,395 6,651 6,947 296
Government goods and services n.i.e. 7,090 8,701 8,479 8,573 94
Primary income receipts 312,696 326,508 339,004 354,525 15,521
Investment income 310,830 324,634 337,131 352,648 15,517
Direct investment income 163,605 164,024 164,607 167,517 2,910
Income on equity 159,283 158,574 159,306 161,532 2,226
Dividends and withdrawals 75,581 54,447 100,702 87,051 −13,651
Reinvested earnings 83,702 104,128 58,604 74,481 15,877
Interest 4,322 5,450 5,301 5,985 684
Portfolio investment income 116,551 117,080 120,260 125,644 5,384
Income on equity and investment fund shares 76,402 76,726 79,288 83,517 4,229
Interest on debt securities 40,149 40,354 40,972 42,127 1,155
Other investment income 30,073 42,323 50,673 57,603 6,930
Reserve asset income 601 1,208 1,590 1,884 294
Compensation of employees 1,866 1,874 1,873 1,878 5
Secondary income (current transfer) receipts2 45,384 52,985 44,939 45,893 954
p
Preliminary
r
Revised
n.a.
Not available
n.i.e.
Not included elsewhere

Table Footnotes

  1. See also “Table 2.1. U.S. Trade in Services, by Type of Service” on the BEA website.
  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 tables 1.2, 2.1, 3.1, 4.1, and 5.1 of the International Transactions Accounts Interactive Data Application on the BEA website.
U.S. Bureau of Economic Analysis

Table C. Imports of Goods and Services and Income Payments
[Millions of dollars, seasonally adjusted]
Series 2022 2023 Change 2023:Q1
to 2023:Q2
Q3 Q4 Q1r Q2p
Imports of goods and services and income payments 1,362,945 1,354,207 1,367,634 1,357,423 −10,211
Imports of goods 813,966 791,865 789,815 772,752 −17,063
General merchandise 810,025 787,004 784,570 760,656 −23,914
Foods, feeds, and beverages 51,814 52,084 51,704 48,886 −2,818
Industrial supplies and materials 204,712 189,498 179,078 163,607 −15,471
Energy products 89,600 79,477 77,056 65,090 −11,966
Of which: Petroleum and products 80,919 72,321 67,652 58,894 −8,758
Nonenergy products 115,112 110,021 102,022 98,517 −3,505
Capital goods except automotive 220,223 220,012 217,833 213,624 −4,209
Automotive vehicles, parts, and engines 101,858 103,734 109,689 113,486 3,797
Consumer goods except food and automotive 203,770 192,285 194,809 189,399 −5,410
Other general merchandise 27,649 29,391 31,456 31,653 197
Nonmonetary gold 3,940 4,861 5,246 12,096 6,850
Imports of services1 178,855 180,228 181,201 175,662 −5,539
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. 1,418 1,572 1,654 1,674 20
Transport 41,546 38,396 36,571 34,639 −1,932
Travel (for all purposes including education) 31,118 33,726 37,510 36,114 −1,396
Business 3,381 3,620 4,058 4,157 99
Personal 27,737 30,106 33,452 31,957 −1,495
Construction 234 222 217 242 25
Insurance services 15,161 15,866 13,759 13,745 −14
Financial services 14,772 16,050 15,170 14,777 −393
Charges for the use of intellectual property n.i.e. 12,265 11,963 10,663 10,791 128
Telecommunications, computer, and information services 13,236 13,459 14,497 14,276 −221
Other business services 35,522 34,988 36,871 35,232 −1,639
Personal, cultural, and recreational services 7,283 7,644 7,978 7,779 −199
Government goods and services n.i.e. 6,299 6,342 6,312 6,392 80
Primary income payments 273,204 288,414 307,558 319,521 11,963
Investment income 267,301 282,281 301,576 313,265 11,689
Direct investment income 80,908 78,862 82,177 81,598 −579
Portfolio investment income 147,849 148,829 153,630 158,154 4,524
Income on equity and investment fund shares 49,810 49,533 52,695 54,229 1,534
Interest on debt securities 98,039 99,296 100,934 103,925 2,991
Other investment income 38,544 54,590 65,769 73,513 7,744
Compensation of employees 5,903 6,133 5,982 6,256 274
Secondary income (current transfer) payments2 96,920 93,700 89,059 89,488 429
Supplemental detail on insurance transactions:          
Premiums paid 40,242 42,503 36,492 37,226 734
Losses recovered 35,145 26,626 26,578 26,560 −18
p
Preliminary
r
Revised
n.a.
Not available
n.i.e.
Not included elsewhere

Table Footnotes

  1. See also “Table 2.1. U.S. Trade in Services, by Type of Service” on the BEA website.
  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 tables 1.2, 2.1, 3.1, 4.1, and 5.1 of the International Transactions Accounts Interactive Data Application on the BEA website.
U.S. Bureau of Economic Analysis

Capital-transfer receipts decreased $37 million to $7 million (table A). Capital-transfer payments decreased $3.2 billion to $2.8 billion, reflecting a decrease in infrastructure grants.

Net financial-account transactions were −$109.0 billion in the second quarter, reflecting net U.S. borrowing from foreign residents (table A).

Financial assets

Second-quarter transactions increased U.S. residents' foreign financial assets by $238.2 billion (charts 5 and 6 and table D). Transactions increased other investment assets, mostly loans, by $109.2 billion; direct investment assets, mostly equity, by $88.4 billion; portfolio investment assets, mostly equity, by $40.3 billion; and reserve assets by $0.3 billion.

Liabilities

Second-quarter transactions increased U.S. liabilities to foreign residents by $342.5 billion. Transactions increased portfolio investment liabilities, mostly long-term debt securities, by $387.1 billion and direct investment liabilities, mostly equity, by $100.5 billion. Transactions decreased other investment liabilities, mostly loans, by $145.2 billion.

Financial derivatives

Net transactions in financial derivatives were −$4.7 billion in the second quarter, reflecting net U.S. borrowing from foreign residents.

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

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

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Table D. Net U.S. Acquisition of Financial Assets and Net U.S. Incurrence of Liabilities
[Millions of dollars, seasonally adjusted]
Series 2022 2023 Change 2023:Q1 to 2023:Q2
Q3 Q4 Q1r Q2p
Net U.S. acquisition of financial assets excluding financial derivatives (net increase in assets / financial outflow (+)) 336,063 −260,318 208,346 238,206 29,860
Direct investment assets 74,788 105,743 108,734 88,444 −20,290
Equity 105,980 109,714 68,850 81,524 12,674
Equity other than reinvestment of earnings 22,278 5,586 10,246 7,043 −3,203
Reinvestment of earnings 83,702 104,128 58,604 74,481 15,877
Debt instruments −31,192 −3,971 39,884 6,920 −32,964
Portfolio investment assets 271,824 −330,802 8,109 40,295 32,186
Equity and investment fund shares 163,858 −264,288 −40,678 27,145 67,823
Debt securities 107,966 −66,514 48,787 13,150 −35,637
Short-term securities 28,401 −5,958 −997 −19,005 −18,008
Long-term corporate securities 60,263 −46,689 34,091 26,233 −7,858
Other long-term securities 19,302 −13,867 15,693 5,922 −9,771
Other investment assets −11,346 −38,162 90,725 109,195 18,470
Other equity 335 165 266 1,582 1,316
Currency and deposits 77,815 27,131 −69,162 5,945 75,107
Loans −90,578 −63,548 162,134 103,397 −58,737
Trade credit and advances 1,083 −1,911 −2,513 −1,730 783
Reserve assets 797 2,903 778 272 −506
Monetary gold 0 0 0 0 0
Special drawing rights 704 1,223 969 812 −157
Reserve position in the International Monetary Fund 131 1,652 −210 −637 −427
Other reserve assets −38 29 19 97 78
Net U.S. incurrence of liabilities excluding financial derivatives (net increase in liabilities / financial inflow (+)) 518,520 −80,707 556,677 342,471 −214,206
Direct investment liabilities 121,427 66,847 112,094 100,480 −11,614
Equity 94,365 73,985 116,807 72,846 −43,961
Equity other than reinvestment of earnings 37,868 21,805 66,062 17,202 −48,860
Reinvestment of earnings 56,497 52,180 50,745 55,644 4,899
Debt instruments 27,061 −7,138 −4,712 27,633 32,345
Portfolio investment liabilities 262,475 −101,060 299,510 387,142 87,632
Equity and investment fund shares −5,289 −246,432 74,159 75,309 1,150
Debt securities 267,764 145,372 225,351 311,833 86,482
Short-term securities 73,949 43,710 −7,487 −24,348 −16,861
Treasury bills and certificates 24,173 30,378 12,633 −42,249 −54,882
Federally sponsored agency securities 3,175 3,719 3,764 −6,499 −10,263
Other short-term securities 46,601 9,613 −23,884 24,400 48,284
Long-term securities 193,815 101,662 232,838 336,182 103,344
Treasury bonds and notes 105,860 16,692 150,411 198,900 48,489
Federally sponsored agency securities 44,290 67,563 37,587 49,965 12,378
Corporate bonds and notes 42,127 17,772 45,260 85,440 40,180
Other long-term securities 1,538 −365 −420 1,877 2,297
Other investment liabilities 134,618 −46,494 145,073 −145,151 −290,224
Other equity n.a. n.a. n.a. n.a. n.a.
Currency 3,463 11,247 6,807 11,869 5,062
Deposits 26,058 −24,098 55,438 −50,793 −106,231
Loans 101,151 −37,079 78,958 −111,355 −190,313
Trade credit and advances 3,945 3,435 3,869 5,127 1,258
Special drawing rights allocations 0 0 0 0 0
p
Preliminary
r
Revised
n.a.
Not available

Note. The statistics are presented in tables 1.2, 6.1, 7.1, and 8.1 of the International Transactions Accounts Interactive Data Application on the BEA website.
U.S. Bureau of Economic Analysis

The U.S. international transactions statistics for the first quarter of 2023 have been updated to incorporate newly available and revised source data (table E).

Table E. Updates to First-Quarter 2023 International Transactions Aggregates
[Millions of dollars, seasonally adjusted]
Series Preliminary estimates Revised estimates
Balance on current account −219,300 −214,472
Balance on goods −263,141 −263,268
Balance on services 62,145 61,470
Balance on primary income 31,296 31,446
Balance on secondary income (current transfers) −49,600 −44,120
Net lending or borrowing from financial-account transactions −326,769 −350,058
Net U.S. acquisition of financial assets −59,676 208,346
Net U.S. incurrence of liabilities 265,366 556,677
Financial derivatives other than reserves, net transactions −1,727 −1,727

U.S. Bureau of Economic Analysis

Footnotes

  1. U.S. international transactions are presented in current dollars in accordance with international statistical presentation guidelines. For a comparison of current-dollar, or nominal, and inflation-adjusted, or real, measures of international transactions, see “SECTION 4 – FOREIGN TRANSACTIONS” of the National Income and Product Accounts.