A Look at the U.S. International Transactions

Third Quarter of 2023

By Elliot Berg  |  January 16, 2024

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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 $16.5 billion, or 7.6 percent, to $200.3 billion in the third quarter of 2023 (chart 1 and table A). The revised second-quarter deficit was $216.8 billion.

The third-quarter deficit was 2.9 percent of current-dollar gross domestic product, down from 3.2 percent in the second quarter.

The $16.5 billion narrowing of the current-account deficit in the third quarter mostly reflected a reduced 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:Q2 to 2023:Q3
Q4 Q1 Q2r Q3p
Current account          
Exports of goods and services and income receipts (credits) 1,138,053 1,153,162 1,142,858 1,175,811 32,953
Exports of goods and services 758,561 769,219 746,795 768,601 21,806
Goods 517,725 526,548 497,270 516,414 19,144
Services 240,836 242,671 249,525 252,187 2,662
Primary income receipts 326,508 339,004 350,315 362,114 11,799
Secondary income (current transfer) receipts 52,985 44,939 45,749 45,097 −652
Imports of goods and services and income payments (debits) 1,354,207 1,367,634 1,359,664 1,376,116 16,452
Imports of goods and services 972,093 971,017 950,594 953,338 2,744
Goods 791,865 789,815 772,770 777,367 4,597
Services 180,228 181,201 177,824 175,971 −1,853
Primary income payments 288,414 307,558 318,070 332,107 14,037
Secondary income (current transfer) payments 93,700 89,059 91,000 90,671 −329
Capital account          
Capital transfer receipts and other credits 23 44 8 18 10
Capital transfer payments and other debits 3,444 5,957 2,745 2,123 −622
Financial account          
Net U.S. acquisition of financial assets excluding financial derivatives (net increase in assets / financial outflow (+)) −260,318 208,346 201,852 323,357 121,505
Direct investment assets 105,743 108,734 86,516 101,614 15,098
Portfolio investment assets −330,802 8,109 38,966 47,181 8,215
Other investment assets −38,162 90,725 76,098 174,163 98,065
Reserve assets 2,903 778 272 400 128
Net U.S. incurrence of liabilities excluding financial derivatives (net increase in liabilities / financial inflow (+)) −80,707 556,677 337,499 463,018 125,519
Direct investment liabilities 66,847 112,094 111,530 80,841 −30,689
Portfolio investment liabilities −101,060 299,510 402,487 193,074 −209,413
Other investment liabilities −46,494 145,073 −176,518 189,102 365,620
Financial derivatives other than reserves, net transactions −6,949 −1,727 −4,741 1,068 5,809
Statistical discrepancy          
Statistical discrepancy1 33,015 −129,673 79,154 63,818 −15,336
Balances          
Balance on current account −216,154 −214,472 −216,805 −200,304 16,501
Balance on goods and services −213,532 −201,798 −203,799 −184,737 19,062
Balance on goods −274,140 −263,268 −275,500 −260,953 14,547
Balance on services 60,608 61,470 71,701 76,216 4,515
Balance on primary income 38,094 31,446 32,245 30,007 −2,238
Balance on secondary income −40,716 −44,120 −45,251 −45,574 −323
Balance on capital account −3,421 −5,913 −2,737 −2,106 631
Net lending (+) or net borrowing (−) from current- and capital-account transactions2 −219,575 −220,385 −219,542 −202,410 17,132
Net lending (+) or net borrowing (−) from financial-account transactions3 −186,560 −350,058 −140,388 −138,592 1,796
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 increased $33.0 billion to $1.18 trillion 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 $16.5 billion to $1.38 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 increased $19.1 billion to $516.4 billion, and imports of goods increased $4.6 billion to $777.4 billion. The increases in both exports and imports reflected increases in most major categories. The increase in exports was led by industrial supplies and materials, primarily petroleum and products. The increase in imports was led by automotive vehicles, parts, and engines, primarily passenger cars and other parts and accessories. Partly offsetting this increase was a decrease in imports of nonmonetary gold.

Trade in services

Exports of services increased $2.7 billion to $252.2 billion, reflecting an increase in travel, mainly other personal travel, that was partly offset by a decrease in technical, trade-related, and other business services, a subcategory of the broader other business services category.2 Imports of services decreased $1.9 billion to $176.0 billion, reflecting a decrease in transport, mostly sea freight transport.

Primary income

Receipts of primary income increased $11.8 billion to $362.1 billion, and payments of primary income increased $14.0 billion to $332.1 billion. The increases in both receipts and payments reflected increases in most major categories. The increase in receipts was led by direct investment income, mainly earnings. The increase in payments was led by other investment income, mostly interest on loans and deposits.

Secondary income

Receipts of secondary income decreased $0.7 billion to $45.1 billion, reflecting a decrease in general government transfers, mostly fines and penalties. Payments of secondary income decreased $0.3 billion to $90.7 billion, reflecting a decrease in general government transfers, mainly international cooperation, that was mostly offset by an increase in private transfers, led by fines and penalties.

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:Q2
to 2023:Q3
Q4 Q1 Q2r Q3p
Exports of goods and services and income receipts 1,138,053 1,153,162 1,142,858 1,175,811 32,953
Exports of goods 517,725 526,548 497,270 516,414 19,144
General merchandise 507,683 518,454 488,465 503,617 15,152
Foods, feeds, and beverages 42,036 44,332 39,161 38,502 −659
Industrial supplies and materials 196,470 189,213 170,549 175,757 5,208
Energy products 100,789 95,512 82,043 87,855 5,812
Of which: Petroleum and products 79,391 76,829 66,155 72,042 5,887
Nonenergy products 95,681 93,701 88,506 87,902 −604
Capital goods except automotive 146,859 148,563 148,079 152,047 3,968
Automotive vehicles, parts, and engines 41,969 43,487 44,581 48,388 3,807
Consumer goods except food and automotive 59,998 68,188 63,430 66,274 2,844
Other general merchandise 20,350 24,671 22,664 22,649 −15
Net exports of goods under merchanting 232 192 186 133 −53
Nonmonetary gold 9,810 7,902 8,618 12,663 4,045
Exports of services1 240,836 242,671 249,525 252,187 2,662
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. 3,867 3,654 3,992 4,542 550
Transport 23,599 24,132 23,969 24,490 521
Travel (for all purposes including education) 38,932 39,686 42,321 45,837 3,516
Business 8,057 8,096 8,916 9,462 546
Personal 30,875 31,590 33,405 36,375 2,970
Construction 359 261 207 229 22
Insurance services 5,861 5,952 6,040 6,224 184
Financial services 41,179 43,315 42,720 43,610 890
Charges for the use of intellectual property n.i.e. 30,058 31,904 31,935 30,937 −998
Telecommunications, computer, and information services 17,398 17,197 18,406 18,634 228
Other business services 64,487 61,440 64,327 62,501 −1,826
Personal, cultural, and recreational services 6,395 6,651 6,761 6,809 48
Government goods and services n.i.e. 8,701 8,479 8,846 8,373 −473
Primary income receipts 326,508 339,004 350,315 362,114 11,799
Investment income 324,634 337,131 348,438 360,232 11,794
Direct investment income 164,024 164,607 163,958 171,080 7,122
Income on equity 158,574 159,306 157,926 165,203 7,277
Dividends and withdrawals 54,447 100,702 85,452 93,260 7,808
Reinvested earnings 104,128 58,604 72,473 71,943 −530
Interest 5,450 5,301 6,032 5,877 −155
Portfolio investment income 117,080 120,260 125,462 124,612 −850
Income on equity and investment fund shares 76,726 79,288 83,401 81,631 −1,770
Interest on debt securities 40,354 40,972 42,061 42,982 921
Other investment income 42,323 50,673 57,134 62,403 5,269
Reserve asset income 1,208 1,590 1,884 2,137 253
Compensation of employees 1,874 1,873 1,877 1,882 5
Secondary income (current transfer) receipts2 52,985 44,939 45,749 45,097 −652
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:Q2
to 2023:Q3
Q4 Q1 Q2r Q3p
Imports of goods and services and income payments 1,354,207 1,367,634 1,359,664 1,376,116 16,452
Imports of goods 791,865 789,815 772,770 777,367 4,597
General merchandise 787,004 784,570 760,674 770,368 9,694
Foods, feeds, and beverages 52,084 51,704 48,886 50,631 1,745
Industrial supplies and materials 189,498 179,078 163,625 162,864 −761
Energy products 79,477 77,056 65,108 70,192 5,084
Of which: Petroleum and products 72,321 67,652 58,912 64,886 5,974
Nonenergy products 110,021 102,022 98,517 92,672 −5,845
Capital goods except automotive 220,012 217,833 213,624 214,426 802
Automotive vehicles, parts, and engines 103,734 109,689 113,486 118,908 5,422
Consumer goods except food and automotive 192,285 194,809 189,399 191,903 2,504
Other general merchandise 29,391 31,456 31,653 31,636 −17
Nonmonetary gold 4,861 5,246 12,096 6,998 −5,098
Imports of services1 180,228 181,201 177,824 175,971 −1,853
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. 1,572 1,654 1,810 1,644 −166
Transport 38,396 36,571 36,096 34,773 −1,323
Travel (for all purposes including education) 33,726 37,510 36,577 36,458 −119
Business 3,620 4,058 3,902 4,421 519
Personal 30,106 33,452 32,675 32,037 −638
Construction 222 217 239 261 22
Insurance services 15,866 13,759 14,422 14,439 17
Financial services 16,050 15,170 14,736 14,749 13
Charges for the use of intellectual property n.i.e. 11,963 10,663 10,994 11,017 23
Telecommunications, computer, and information services 13,459 14,497 13,927 14,285 358
Other business services 34,988 36,871 35,084 34,780 −304
Personal, cultural, and recreational services 7,644 7,978 7,556 7,300 −256
Government goods and services n.i.e. 6,342 6,312 6,382 6,264 −118
Primary income payments 288,414 307,558 318,070 332,107 14,037
Investment income 282,281 301,576 311,814 325,844 14,030
Direct investment income 78,862 82,177 80,513 84,558 4,045
Portfolio investment income 148,829 153,630 158,457 162,165 3,708
Income on equity and investment fund shares 49,533 52,695 54,273 53,804 −469
Interest on debt securities 99,296 100,934 104,185 108,362 4,177
Other investment income 54,590 65,769 72,844 79,120 6,276
Compensation of employees 6,133 5,982 6,256 6,263 7
Secondary income (current transfer) payments2 93,700 89,059 91,000 90,671 −329
Supplemental detail on insurance transactions:          
Premiums paid 42,503 36,492 39,196 39,349 153
Losses recovered 26,626 26,578 26,572 26,526 −46
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 increased $10 million to $18 million (table A). Capital-transfer payments decreased $0.6 billion to $2.1 billion, reflecting a decrease in infrastructure grants.

Net financial-account transactions were −$138.6 billion in the third quarter, reflecting net U.S. borrowing from foreign residents (table A).

Financial assets

Third-quarter transactions increased U.S. residents’ foreign financial assets by $323.4 billion (charts 5 and 6 and table D). Transactions increased other investment assets, mostly loans, by $174.2 billion; direct investment assets, mostly equity, by $101.6 billion; portfolio investment assets, mostly equity, by $47.2 billion; and reserve assets by $0.4 billion.

Liabilities

Third-quarter transactions increased U.S. liabilities to foreign residents by $463.0 billion. Transactions increased portfolio investment liabilities, mostly debt securities, by $193.1 billion; other investment liabilities, mostly loans, by $189.1 billion; and direct investment liabilities, mostly equity, by $80.8 billion.

Financial derivatives

Net transactions in financial derivatives were $1.1 billion in the third quarter, reflecting net U.S. lending to 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:Q2 to 2023:Q3
Q4 Q1 Q2r Q3p
Net U.S. acquisition of financial assets excluding financial derivatives (net increase in assets / financial outflow (+)) −260,318 208,346 201,852 323,357 121,505
Direct investment assets 105,743 108,734 86,516 101,614 15,098
Equity 109,714 68,850 80,025 83,592 3,567
Equity other than reinvestment of earnings 5,586 10,246 7,551 11,649 4,098
Reinvestment of earnings 104,128 58,604 72,473 71,943 −530
Debt instruments −3,971 39,884 6,491 18,022 11,531
Portfolio investment assets −330,802 8,109 38,966 47,181 8,215
Equity and investment fund shares −264,288 −40,678 26,322 28,981 2,659
Debt securities −66,514 48,787 12,644 18,200 5,556
Short-term securities −5,958 −997 −18,872 13,668 32,540
Long-term corporate securities −46,689 34,091 25,721 3,900 −21,821
Other long-term securities −13,867 15,693 5,795 632 −5,163
Other investment assets −38,162 90,725 76,098 174,163 98,065
Other equity 165 266 1,582 0 −1,582
Currency and deposits 27,131 −69,162 −28,532 24,176 52,708
Loans −63,548 162,134 104,892 147,921 43,029
Trade credit and advances −1,911 −2,513 −1,844 2,065 3,909
Reserve assets 2,903 778 272 400 128
Monetary gold 0 0 0 0 0
Special drawing rights 1,223 969 812 1,713 901
Reserve position in the International Monetary Fund 1,652 −210 −637 −1,487 −850
Other reserve assets 29 19 97 175 78
Net U.S. incurrence of liabilities excluding financial derivatives (net increase in liabilities / financial inflow (+)) −80,707 556,677 337,499 463,018 125,519
Direct investment liabilities 66,847 112,094 111,530 80,841 −30,689
Equity 73,985 116,807 73,749 70,623 −3,126
Equity other than reinvestment of earnings 21,805 66,062 20,268 9,910 −10,358
Reinvestment of earnings 52,180 50,745 53,481 60,714 7,233
Debt instruments −7,138 −4,712 37,781 10,218 −27,563
Portfolio investment liabilities −101,060 299,510 402,487 193,074 −209,413
Equity and investment fund shares −246,432 74,159 74,039 3,874 −70,165
Debt securities 145,372 225,351 328,448 189,200 −139,248
Short-term securities 43,710 −7,487 10,290 88,570 78,280
Treasury bills and certificates 30,378 12,633 −13,992 111,265 125,257
Federally sponsored agency securities 3,719 3,764 −5,892 −5,017 875
Other short-term securities 9,613 −23,884 30,174 −17,678 −47,852
Long-term securities 101,662 232,838 318,157 100,630 −217,527
Treasury bonds and notes 16,692 150,411 182,120 −191 −182,311
Federally sponsored agency securities 67,563 37,587 49,619 46,165 −3,454
Corporate bonds and notes 17,772 45,260 84,409 53,056 −31,353
Other long-term securities −365 −420 2,009 1,600 −409
Other investment liabilities −46,494 145,073 −176,518 189,102 365,620
Other equity n.a. n.a. n.a. n.a. n.a.
Currency 11,247 6,807 11,869 −9,688 −21,557
Deposits −24,098 55,438 −50,727 36,981 87,708
Loans −37,079 78,958 −142,460 154,748 297,208
Trade credit and advances 3,435 3,869 4,800 7,061 2,261
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 second quarter of 2023 have been updated to incorporate newly available and revised source data (table E).

Table E. Updates to Second-Quarter 2023 International Transactions Aggregates
[Millions of dollars, seasonally adjusted]
Series Preliminary estimates Revised estimates
Balance on current account −212,104 −216,805
Balance on goods −275,173 −275,500
Balance on services 71,659 71,701
Balance on primary income 35,004 32,245
Balance on secondary income (current transfers) −43,595 −45,251
Net lending or borrowing from financial-account transactions −109,006 −140,388
Net U.S. acquisition of financial assets 238,206 201,852
Net U.S. incurrence of liabilities 342,471 337,499
Financial derivatives other than reserves, net transactions −4,741 −4,741

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.
  2. Underlying detail on U.S. trade in services presented in tables B and C of this article is available from table 3.1 of the International Transactions Accounts Interactive Data Application.