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News Release: U.S. International Transactions


The tables in this release are available in an XLS spreadsheet and the entire release is available in PDF format.

NOTE: This news release is available on BEA's Web site at <www.bea.gov/newsreleases/rels.htm>.

FOR WIRE TRANSMISSION: 8:30 A.M. EDT, MONDAY, SEPTEMBER 15, 2003

Douglas B. Weinberg:     (202) 606-9590                               BEA 03-36

Recorded Message:              606-5362


        U.S. International Transactions: Second Quarter 2003

                           Current Account

    The U.S. current-account deficit--the combined balances on trade in goods
and services, income, and net unilateral current transfers--was virtually
unchanged at $138.7 billion (preliminary) in the second quarter of 2003.  An
increase in the deficit on goods was offset by increases in the surpluses on
income and on services and a decrease in net outflows for unilateral current
ransfers.

Goods and services

    The deficit on goods and services increased to $123.4 billion in the second
quarter from $121.6 billion in the first.

    Goods

    The deficit on goods increased to $138.0 billion in the second quarter from
$136.0 billion in the first.  Goods exports increased to $174.0 billion from
$173.3 billion.  Small increases in industrial supplies and materials and in
consumer goods were partly offset by a small decrease in capital goods.

Goods imports increased to $312.0 billion from $309.4 billion.  An increase in
nonpetroleum products more than offset a decrease in petroleum and petroleum
products.  The increase in nonpetroleum products was largely accounted for by
increases in capital goods and in automotive vehicles, parts, and engines.

    Services

    The surplus on services increased to $14.6 billion in the second quarter
from $14.4 billion in the first.  Services receipts were virtually unchanged at
$74.0 billion.  A decrease in travel was almost entirely offset by increases in
all other services categories combined.  Services payments decreased to
$59.4 billion from $59.6 billion.  Decreases in travel and in passenger fares
were mostly offset by increases in all other services categories combined.

Income

    The surplus on income increased to $1.7 billion in the second quarter from
$0.2 billion in the first.

    Investment income  

    Income receipts on U.S.-owned assets abroad increased
slightly to $62.2 billion from $62.1 billion.  An increase in direct investment
receipts more than offset decreases in "other" private receipts (which consists
of interest and dividends) and in U.S. Government receipts.

    Income payments on foreign-owned assets in the United States decreased to
$59.2 billion from $60.5 billion.  Decreases in "other" private payments (which
consists of interest and dividends) and in U.S. Government payments more than
offset an increase in direct investment payments.

    Compensation of employees  

    Receipts for compensation of U.S. workers abroad
were virtually unchanged at $0.8 billion.  Payments for compensation of foreign
workers in the United States decreased slightly to $2.1 billion from $2.2 billion.

Unilateral current transfers

    Unilateral current transfers were net outflows of $16.9 billion in the
second quarter, down from net outflows of $17.3 billion in the first.

                         Capital and Financial Account

                                Capital Account

    Capital account transactions were net outflows of $0.3 billion in the
second quarter, down slightly from net outflows of $0.4 billion in the first.

                               Financial Account

    Net recorded financial inflows--net acquisitions by foreign residents of
assets in the United States less net acquisitions by U.S. residents of assets
abroad--were $148.6 billion in the second quarter, up from $140.7 billion in
the first.  Financial inflows for foreign-owned assets in the United States
strengthened more than financial outflows for U.S.-owned assets abroad.

U.S.-owned assets abroad

    U.S.-owned assets abroad increased $106.7 billion in the second quarter,
compared with an increase of $101.3 billion in the first.

    U.S. claims on foreigners reported by U.S. banks increased $60.6 billion in
the second quarter, following an increase of $27.8 billion in the first.

    Transactions in foreign securities shifted to net U.S. sales of $9.2 billion
in the second quarter from net U.S. purchases of $27.1 billion in the first.
Net U.S. purchases of foreign stocks were $16.9 billion, down from $34.4 billion.
Net U.S. sales of foreign bonds were $26.2 billion, up from $7.2 billion.

    Net financial outflows for U.S. direct investment abroad were $32.0 billion
in the second quarter, down from $34.4 billion in the first.  A shift in
intercompany debt to net inflows from net outflows and a decrease in reinvested
earnings more than offset an increase in net equity capital outflows.

    U.S. official reserve assets increased $0.2 billion in the second quarter, in
contrast to a decrease of $0.1 billion in the first.

Foreign-owned assets in the United States

    Foreign-owned assets in the United States increased $255.3 billion in the
second quarter, compared with an increase of $242.0 billion in the first.

    U.S. liabilities to foreigners reported by U.S. banks increased $33.2 billion
n the second quarter, following an increase of $16.7 billion in the first.

    Net foreign purchases of U.S. securities other than U.S. Treasury securities
were $86.5 billion in the second quarter, up from $55.6 billion in the first.
Transactions in U.S. stocks shifted to net foreign purchases of $20.6 billion
from net foreign sales of $2.6 billion.  Net foreign purchases of U.S. corporate
bonds increased to $67.2 billion from $60.4 billion, and net foreign sales of
federally sponsored agency bonds decreased to $1.3 billion from $2.2 billion.

    Net foreign purchases of U.S. Treasury securities were $61.1 billion in the
second quarter, up from $14.6 billion in the first.

    Net financial inflows for foreign direct investment in the United States were
$12.1 billion in the second quarter, down from $34.4 billion in the first.  The
decrease was more than accounted for by a large decrease in net equity capital
inflows.  Reinvested earnings also declined.  In contrast, intercompany debt
shifted to net inflows from net outflows.

    Foreign official assets in the United States increased $57.6 billion in the
second quarter, following an increase of $41.0 billion in the first.

    Net U.S. currency shipments were $1.5 billion in the second quarter, down
from $4.9 billion in the first.

    The statistical discrepancy--errors and omissions in recorded transactions--was
a negative $9.6 billion in the second quarter, compared with a negative $1.6 billion
in the first.

    In the second quarter, the U.S. dollar depreciated 5 percent on a trade-weighted
quarterly average basis against a group of 7 major currencies.

                                 Revisions

    The first-quarter international transactions are revised from previously
published estimates.  The current-account deficit was revised to $138.7 billion
from $136.1 billion.  The goods deficit was virtually unchanged at $136.0 billion;
the services surplus was virtually unchanged at $14.4 billion; the income surplus
was revised to $0.2 billion from $2.6 billion; and unilateral current transfers
were revised to net outflows of $17.3 billion from net outflows of $17.1 billion.
Net recorded financial inflows were revised to $140.7 billion from $112.8 billion.

                         *         *          *

    Release dates in 2003:

    Third quarter 2003..............................December 16, 2003 (Tuesday)

                         *          *         *

    BEA's major national, regional, international, and industry estimates, the
Survey of Current Business, and BEA news releases are available on BEA's Web site:

                               <www.bea.gov>

    Summary BEA estimates are available on recorded messages at the time of public
release at the following telephone numbers:

        (202) 606-5362 U.S. international transactions
                 -5306 Gross domestic product
                 -5303 Personal income and outlays

    Most of BEA's estimates and analyses are published in the Survey of Current
Business, BEA's monthly journal.  Subscriptions and single copies of the printed
Survey are for sale by the Superintendent of Documents, U.S. Government Printing
Office.  Internet: <bookstore.gpo.gov> phone: (202) 512-1800; fax: (202) 512-2250;
mail: Stop SSOP, Washington, DC 20402-0001.
                                                                                                                                                                                 September 15, 2003


Table 1. U.S. International Transactions
[Millions of dollars, quarters seasonally adjusted]

                                                                                                                    2002                                            2003                    Change:
                                         (Credits +, debits -)                                          2002                                                                                 2003
                                                                                                                      I           II         III          IV          Ir         IIp         I-II

                                           Current account

 1 Exports of goods and services and income receipts................................................   1,229,649     297,074     307,616     313,939     311,015     310,278     311,002         724

 2      Exports of goods and services...............................................................     974,107     236,442     243,696     247,815     246,151     247,377     247,991         614

 3          Goods, balance of payments basis........................................................     681,874     165,298     171,421     174,315     170,840     173,346     174,034         688

 4          Services................................................................................     292,233      71,144      72,275      73,500      75,311      74,031      73,957         -74
 5              Transfers under U.S. military agency sales contracts................................      11,943       2,785       2,751       3,418       2,989       2,827       3,023         196

 6              Travel..............................................................................      66,547      16,295      16,030      16,217      18,005      16,089      14,902      -1,187
 7              Passenger fares.....................................................................      17,046       4,224       4,279       4,288       4,255       3,736       3,768          32
 8              Other transportation................................................................      29,166       7,102       7,075       7,307       7,682       7,837       7,910          73

 9               Royalties and license fees.........................................................      44,142      10,373      11,221      11,389      11,157      11,630      11,643          13
10               Other private services.............................................................     122,594      30,170      30,720      30,681      31,022      31,710      32,509         799
11               U.S. Government miscellaneous services.............................................         795         195         199         200         201         202         202        ....

12      Income receipts.............................................................................     255,542      60,632      63,920      66,124      64,864      62,901      63,011         110
13           Income receipts on U.S.-owned assets abroad............................................     252,379      59,821      63,140      65,339      64,077      62,094      62,197         103
14               Direct investment receipts.........................................................     142,933      32,058      34,874      37,264      38,735      37,508      39,131       1,623
15               Other private receipts.............................................................     106,143      26,950      27,560      27,225      24,408      23,700      22,321      -1,379
16               U.S. Government receipts...........................................................       3,303         813         706         850         934         886         745        -141
17           Compensation of employees..............................................................       3,163         811         780         785         787         807         814           7

18 Imports of goods and services and income payments................................................  -1,651,657    -387,864    -416,962    -422,666    -424,165    -431,716    -432,731      -1,015

19      Imports of goods and services...............................................................  -1,392,145    -326,499    -348,584    -354,795    -362,267    -369,006    -371,399      -2,393

20          Goods, balance of payments basis........................................................  -1,164,746    -271,331    -292,707    -297,627    -303,081    -309,364    -312,013      -2,649

21          Services................................................................................    -227,399     -55,168     -55,877     -57,168     -59,186     -59,642     -59,386         256
22              Direct defense expenditures.........................................................     -19,245      -4,394      -4,668      -4,990      -5,193      -5,674      -6,000        -326

23              Travel..............................................................................     -58,044     -14,453     -14,252     -14,314     -15,025     -14,168     -13,014       1,154
24              Passenger fares.....................................................................     -19,969      -4,874      -4,874      -4,829      -5,392      -4,960      -4,920          40
25              Other transportation................................................................     -38,527      -8,891      -9,580      -9,787     -10,271     -10,873     -11,182        -309

26               Royalties and license fees.........................................................     -19,258      -4,728      -4,902      -5,036      -4,592      -4,698      -4,835        -137
27               Other private services.............................................................     -69,436     -17,087     -16,876     -17,487     -17,984     -18,524     -18,686        -162
28               U.S. Government miscellaneous services.............................................      -2,920        -741        -725        -725        -729        -745        -749          -4

29      Income payments.............................................................................    -259,512     -61,365     -68,378     -67,871     -61,898     -62,710     -61,332       1,378
30           Income payments on foreign-owned assets in the United States...........................    -251,108     -59,271     -66,246     -65,820     -59,771     -60,527     -59,213       1,314
31               Direct investment payments.........................................................     -49,458      -8,134     -13,464     -15,350     -12,510     -15,431     -16,308        -877
32               Other private payments.............................................................    -127,735     -32,512     -33,773     -31,802     -29,648     -28,245     -26,638       1,607
33               U.S. Government payments...........................................................     -73,915     -18,625     -19,009     -18,668     -17,613     -16,851     -16,267         584
34           Compensation of employees..............................................................      -8,404      -2,094      -2,132      -2,051      -2,127      -2,183      -2,119          64

35 Unilateral current transfers, net................................................................     -58,853     -15,938     -13,481     -13,997     -15,436     -17,269     -16,942         327

36      U.S. Government grants......................................................................     -17,097      -6,397      -3,287      -3,075      -4,338      -5,813      -5,620         193
37      U.S. Government pensions and other transfers................................................      -5,125      -1,271      -1,279      -1,282      -1,292      -1,320      -1,335         -15
38      Private remittances and other transfers.....................................................     -36,631      -8,270      -8,915      -9,640      -9,806     -10,136      -9,987         149


                                                                                                                                                                                  September 15, 2003
Table 1.--U.S. International Transactions (Continued)
[Millions of dollars, quarters seasonally adjusted]

                                                                                                                    2002                                            2003                    Change:
                                         (Credits +, debits -)                                          2002                                                                                 2003
                                                                                                                      I           II         III          IV          Ir         IIp         I-II

                                     Capital and financial account

                                            Capital account

39 Capital account transactions, net................................................................      -1,285        -277        -286        -364        -358        -388        -325          63

                                           Financial account

40 U.S.-owned assets abroad, net (increase/financial outflow (-))...................................    -178,985     -35,227    -128,567      29,712     -44,902    -101,331    -106,665      -5,334

41     U.S. official reserve assets, net............................................................      -3,681         390      -1,843      -1,416        -812          83        -170        -253
42          Gold....................................................................................        ....        ....        ....        ....        ....        ....        ....        ....
43          Special drawing rights..................................................................        -475        -109        -107        -132        -127         897        -102        -999
44          Reserve position in the International Monetary Fund.....................................      -2,632         652      -1,607      -1,136        -541        -644          86         730
45          Foreign currencies......................................................................        -574        -153        -129        -148        -144        -170        -154          16

46     U.S. Government assets, other than official reserve assets, net..............................         -32         133          42         -27        -180         -70        -323        -253
47          U.S. credits and other long-term assets.................................................      -5,611        -853        -565      -1,375      -2,818      -2,578        -928       1,650
48          Repayments on U.S. credits and other long-term assets...................................       5,684         994         566       1,452       2,672       2,472         674      -1,798
49          U.S. foreign currency holdings and U.S. short-term assets, net..........................        -105          -8          41        -104         -34          36         -69        -105

50     U.S. private assets, net.....................................................................    -175,272     -35,750    -126,766      31,155     -43,910    -101,344    -106,172      -4,828
51          Direct investment.......................................................................    -137,836     -39,083     -35,459     -31,623     -31,670     -34,405     -32,020       2,385
52          Foreign securities......................................................................      15,801       5,367      -5,843      21,641      -5,364     -27,146       9,240      36,386
53          U.S. claims on unaffiliated foreigners reported by
                 U.S. nonbanking concerns...........................................................     -31,880      -1,886     -16,210     -11,862      -1,922     -11,998     -22,789     -10,791
54          U.S. claims reported by U.S. banks, not included elsewhere..............................     -21,357        -148     -69,254      52,999      -4,954     -27,795     -60,603     -32,808

55 Foreign-owned assets in the United States, net (increase/financial inflow (+))...................     706,983     146,813     221,242     141,478     197,448     242,004     255,273      13,269

56     Foreign official assets in the United States, net............................................      94,860       6,106      47,552       8,992      32,210      40,978      57,580      16,602
57          U.S. Government securities..............................................................      73,521       6,257      21,706      12,300      33,258      31,768      36,522       4,754
58              U.S. Treasury securities............................................................      43,144      -1,039      15,138       1,415      27,630      22,288      33,232      10,944
59              Other...............................................................................      30,377       7,296       6,568      10,885       5,628       9,480       3,290      -6,190
60          Other U.S. Government liabilities.......................................................         137        -597         365         464         -95        -437         -32         405
61          U.S. liabilities reported by U.S. banks, not included elsewhere.........................      17,594        -280      24,575      -4,607      -2,094       8,321      20,385      12,064
62          Other foreign official assets...........................................................       3,608         726         906         835       1,141       1,326         705        -621

63     Other foreign assets in the United States, net...............................................     612,123     140,707     173,690     132,486     165,238     201,026     197,693      -3,333
64          Direct investment.......................................................................      39,633      10,607        -456      14,199      15,281      34,386      12,137     -22,249
65          U.S. Treasury securities................................................................      96,217      11,789      14,218      57,505      12,705      14,568      61,139      46,571
66          U.S. securities other than U.S. Treasury securities.....................................     291,492      74,461     104,187      45,880      66,964      55,574      86,525      30,951
67          U.S. currency...........................................................................      21,513       4,525       7,183       2,556       7,249       4,927       1,458      -3,469
68          U.S. liabilities to unaffiliated foreigners reported by
                 U.S. nonbanking concerns...........................................................      72,142      46,771      24,610      -8,102       8,863      74,848       3,189     -71,659
69          U.S. liabilities reported by U.S. banks, not included elsewhere.........................      91,126      -7,446      23,948      20,448      54,176      16,723      33,245      16,522

70 Statistical discrepancy (sum of above items with sign reversed)..................................     -45,852      -4,581      30,438     -48,102     -23,602      -1,578      -9,612      -8,034

   Memoranda:
71 Balance on goods (lines 3 and 20)................................................................    -482,872    -106,033    -121,286    -123,312    -132,241    -136,018    -137,979      -1,961
72 Balance on services (lines 4 and 21).............................................................      64,834      15,976      16,398      16,332      16,125      14,389      14,571         182
73 Balance on goods and services (lines 2 and 19)...................................................    -418,038     -90,057    -104,888    -106,980    -116,116    -121,629    -123,408      -1,779
74 Balance on income (lines 12 and 29)..............................................................      -3,970        -733      -4,458      -1,747       2,966         191       1,679       1,488
75 Unilateral current transfers, net (line 35)......................................................     -58,853     -15,938     -13,481     -13,997     -15,436     -17,269     -16,942         327
76 Balance on current account (lines 1, 18, and 35 or lines 73, 74, and 75).........................    -480,861    -106,728    -122,827    -122,724    -128,586    -138,707    -138,671          36
r  Revised.  p  Preliminary.

NOTE:--Details may not add to totals because of rounding.     Source:  U. S. Bureau of Economic Analysis