News Release: U.S. International Transactions

      The U.S. current-account deficit—the combined balances on trade in goods and services,
income, and net unilateral current transfers—decreased to $117.4 billion (preliminary) in the
second quarter from $133.6 billion (revised) in the first quarter. The decrease in the
current-account deficit was accounted for by a decrease in the deficit on goods and an
increase in the surplus on income.

Goods and services

      The deficit on goods and services decreased to $139.3 billion in the second quarter
from $148.4 billion in the first.

      Goods

      The deficit on goods decreased to $185.8 billion in the second quarter from $194.3
billion in the first.

      Goods exports increased to $394.1 billion from $388.5 billion. Exports of five of the
six major end-use categories increased. The largest increases were in foods, feeds, and
beverages; consumer goods; and automotive vehicles, parts, and engines. The increase in foods,
feeds, and beverages was mostly due to an increase in soybeans. The increase in consumer goods
was mostly due to an increase in medicinal, dental, and pharmaceutical products. Industrial
supplies and materials decreased; the decrease was more than accounted for by a decrease in
nonmonetary gold (Table 2a).

      Goods imports decreased to $579.9 billion from $582.8 billion, though imports of only
two of the six major end-use categories decreased. The decrease was more than accounted for by
a decrease in imports of industrial supplies and materials that was, in turn, more than
accounted for by a decrease in petroleum and products.  The major end-use categories with the
largest increases were capital goods, consumer goods, and automotive vehicles, parts, and
engines.  The increase in capital goods was largely due to an increase in machinery and
equipment, and the increase in consumer goods reflected increases in both nondurable and
durable goods (Table 2a).

      Services

      The surplus on services increased to $46.5 billion in the second quarter from $45.9
billion in the first.

      Services receipts increased to $157.0 billion from $155.5 billion. Five of the seven
major services categories increased.  The largest increases were in other private services,
which includes items such as financial services, insurance services, and business,
professional, and technical services; royalties and license fees; and travel.

      Services payments increased to $110.5 billion from $109.6 billion. Six of the seven
major services categories increased; the increase mainly reflected an increase in other
private services.

Income

      The surplus on income increased to $55.5 billion in the second quarter from $47.4
billion in the first.

      Investment income

      Income receipts on U.S.-owned assets abroad increased to $184.6 billion from $183.2
billion. The increase was more than accounted for by an increase in other private receipts,
which consists of interest and dividends.  Direct investment receipts decreased.

      Income payments on foreign-owned assets in the United States decreased to $127.2 billion
from $133.9 billion. The decrease was more than accounted for by a decrease in direct
investment payments.  Other private payments increased.

      Compensation of employees

      Receipts for compensation of U.S. residents paid by nonresidents remained at $1.5
billion in the second quarter.  Payments for compensation of foreign residents paid by U.S.
residents remained at $3.4 billion.

Unilateral current transfers

      Net unilateral current transfers to foreigners were $33.6 billion in the second quarter,
up from $32.7 billion in the first. The increase was more than accounted for by an increase in
the category of private remittances and other transfers.

                                        Capital Account

      Net capital account transactions are not available for the second quarter because source
data are not yet available.  Net payments were near zero in the first quarter.

                                       Financial Account

      Net financial inflows were $88.5 billion in the second quarter, down from $164.7 billion
in the first. U.S.-owned assets abroad decreased more in the second quarter than in the first,
and foreign-owned assets in the United States decreased in the second quarter after increasing
in the first.

U.S.-owned assets abroad

      U.S.-owned assets abroad decreased $206.8 billion in the second quarter, following a
decrease of $106.5 billion in the first.

      U.S. claims on foreigners reported by U.S. banks and securities brokers decreased $266.7
billion in the second quarter, after a decrease of $218.4 billion in the first. Examples of
these claims are U.S. banks’ deposits at foreign banks and U.S. banks’ loans to foreigners.
The second-quarter decrease was largely due to a $245.7 billion decrease in claims for own
accounts (Table 10a).

      U.S. sales of foreign securities exceeded purchases by $5.5 billion in the second
quarter, following net sales of $3.6 billion in the first. Net purchases of foreign stocks
were $21.0 billion, up from $14.8 billion. Net sales of foreign bonds were $26.5 billion, up
from $18.4 billion (Table 8a).

      U.S. direct investment abroad was $79.2 billion in the second quarter, down from $116.1
billion in the first. The decrease was more than accounted for by a shift to net inflows from
net outflows of intercompany debt investment (Table 7a).

      U.S. claims on unaffiliated foreigners reported by U.S. nonbanking concerns decreased
$0.4 billion in the second quarter after an increase of $49.2 billion in the first.

      U.S. official reserve assets increased $3.3 billion in the second quarter, following an
increase of $1.2 billion in the first.  The second-quarter increase reflected an increase in
the U.S. reserve position in the International Monetary Fund (IMF) associated with U.S. loans
to the IMF under New Arrangements to Borrow.

      U.S. government assets other than official reserve assets decreased $16.7 billion in the
second quarter, following a decrease of $51.1 billion in the first.  The decreases reflected a
reduction of central bank liquidity swaps between the U.S. Federal Reserve System and foreign
central banks.

Foreign-owned assets in the United States

      Foreign-owned assets in the United States decreased $118.7 billion in the second quarter,
following an increase of $59.6 billion in the first.

      U.S. liabilities to foreigners reported by U.S. banks and securities brokers, other than
those recorded under foreign official assets, decreased $197.8 billion in the second quarter,
after a decrease of $122.1 billion in the first.  Examples of these liabilities are deposits
of foreign residents at banks in the United States and loans by banks abroad to banks in the
United States. The decrease was more than accounted for by a $204.7 billion decrease in
liabilities for own accounts (Table 11a).

      Foreign private purchases of U.S. Treasury securities exceeded sales by $7.4 billion in
the second quarter, slowing from net purchases of $43.8 billion in the first.

      Foreign private sales of U.S. securities other than U.S. Treasury securities exceeded
purchases by $43.2 billion in the second quarter, a shift from foreign net purchases of $3.7
billion in the first. Net sales of U.S. stocks were $8.6 billion, shifting from net purchases
of $18.9 billion. Net sales of U.S. corporate bonds increased to $33.3 billion from $14.8
billion. Net sales of U.S. federally sponsored agency bonds increased to $1.3 billion from
$0.4 billion. (Table 8a).

      Foreign direct investment in the United States was $33.5 billion in the second quarter,
up from $22.2 billion in the first. The increase was accounted for by a shift to inflows from
outflows of intercompany debt investment and an increase in equity investment. These increases
were partly offset by a decrease in reinvested earnings (Table 7a).

      U.S. liabilities to unaffiliated foreigners reported by U.S. nonbanking concerns decreased
$8.8 billion in the second quarter, following an increase of $24.2 billion in the first.

      Foreign official assets in the United States increased $83.0 billion in the second
quarter, after increasing $69.7 billion in the first. The second-quarter increase, like the
first-quarter increase, was due to an increase in foreign-owned U.S. Treasury securities.

      Net shipments of U.S. currency to foreign countries were $7.1 billion in the second
quarter, down from $18.1 billion in the first.

      The statistical discrepancy—the amount that balances the sum of the recorded credits
and debits across all the accounts in the  international transactions accounts —was $28.9
billion in the second quarter compared with -$31.1 billion in the first.

      In the second quarter, the U.S. dollar appreciated 1.5 percent on a trade-weighted
quarterly average basis against a group of 7 major currencies.  Data are based on Federal
Reserve Statistical Release H.10.

                                         Revisions

      The first-quarter 2012 international transactions are revised from previously published
statistics.  The current-account deficit was revised down to $133.6 billion from $137.3
billion. The goods deficit was revised down to $194.3 billion from $194.5 billion; the
services surplus was revised up to $45.9 billion from $43.5 billion; the income surplus was
revised down to $47.4 billion from $47.6 billion; and net outflows of unilateral current
transfers were revised down to $32.7 billion from $33.9 billion.  Net financial inflows were
revised up to $164.7 billion from $156.7 billion.

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      Release dates in 2012:

      Fourth quarter and year 2011..................................March 14, 2012 (Wednesday)
      First quarter 2012..............................................June 14, 2012 (Thursday)
      Second quarter 2012.........................................September 18, 2012 (Tuesday)
      Third quarter 2012...........................................December 18, 2012 (Tuesday)

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NOTE: This news release is available on BEA’s Web site along with Highlights
related to this release, the latest detailed statistics for U.S. international transactions, 
and a description of the estimation methods used to compile them. The second quarter
statistics in this release are preliminary and will be revised on December 18, 2012. All links in
the text of this release—including archived versions of this release—refer to the latest available
revised statistics.

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