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News Release: U.S. International Transactions

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FOR WIRE TRANSMISSION: 8:30 A.M. EDT, FRIDAY, September 14, 2007

Douglas B. Weinberg:        (202) 606-9590                            BEA 07-41


             U.S. International Transactions: Second Quarter 2007

                             Current Account

        The U.S. current-account deficit--the combined balances on trade in goods
and services, income, and net unilateral current transfers--decreased to $190.8
billion (preliminary) in the second quarter of 2007 from $197.1 billion (revised)
in the first quarter.  A decrease in net unilateral current transfers to
foreigners and increases in the surpluses on services and on income more than
accounted for the decrease.  An increase in the deficit on goods was partly
offsetting.

Goods and services

        The deficit on goods and services increased slightly to $177.7 billion
in the second quarter from $177.6 billion in the first.

        Goods

        The deficit on goods increased to $204.2 billion in the second quarter
from $200.9 billion in the first.

        Goods exports increased to $279.3 billion from $270.1 billion.  The
largest increases were in nonagricultural industrial supplies and materials, in
agricultural products, and in automotive vehicles, parts, and engines.

        Goods imports increased to $483.6 billion from $471.0 billion.  The
increase resulted from increases in petroleum and products and in nonpetroleum
industrial supplies and materials.

        Services

        The surplus on services increased to $26.5 billion in the second
quarter from $23.3 billion in the first.

        Services receipts increased to $116.4 billion from $112.0 billion.  The
increase was largely accounted for by increases in “other” private services
(such as business, professional, and technical services, insurance services,
and financial services) and in travel.  “Other” transportation (such as freight
and port services), passenger fares, and royalties and license fees also
increased.

        Services payments increased to $89.8 billion from $88.8 billion.  The
increase was mostly accounted for by increases in “other” private services and
in royalties and license fees.

Income

        The surplus on income increased to $9.4 billion in the second quarter
from $7.5 billion in the first.

        Investment income

        Income receipts on U.S.-owned assets abroad increased to $190.3 billion
from $175.5 billion.  The increase was almost completely accounted for by
increases in “other” private receipts (which consists of interest and dividends)
and in direct investment receipts.

        Income payments on foreign-owned assets in the United States increased
to $179.2 billion from $166.4 billion.  The increase was accounted for by
increases in “other” private payments (which consists of interest and dividends),
in direct investment payments, and in U.S. Government payments (which consists
of interest).

        Compensation of employees

        Receipts for compensation of U.S. workers abroad were virtually unchanged
at $0.7 billion, and payments for compensation of foreign workers in the United
States increased slightly to $2.4 billion from $2.3 billion.

Unilateral current transfers

        Net unilateral current transfers to foreigners were $22.5 billion in the
second quarter, down from $27.0 billion in the first.  The decrease was more
than accounted for by a decrease in U.S. Government grants.

                            Capital Account

        Net capital account payments (outflows) were virtually unchanged at
$0.6 billion in the second quarter.

                            Financial Account

        Net financial inflows--net acquisitions by foreign residents of assets
in the United States less net acquisitions by U.S. residents of assets
abroad--were $150.9 billion in the second quarter, down from $181.9 billion in
the first.  Net U.S. acquisitions of assets abroad picked up more than net
foreign acquisitions of assets in the United States.

U.S.-owned assets abroad

        U.S.-owned assets abroad increased $469.5 billion in the second quarter,
following an increase of $449.5 billion in the first.

        U.S. claims on foreigners reported by U.S. banks increased $203.9
billion in the second quarter, following an increase of $233.4 billion in the
first.

        Net U.S. purchases of foreign securities were $88.1 billion in the second
quarter, up slightly from $87.2 billion in the first.  Net U.S. purchases of
foreign stocks were $40.3 billion, down from $43.5 billion.  Net U.S. purchases
of foreign bonds were $47.8 billion, up from $43.7 billion.

        Net financial flows for U.S. direct investment abroad were $71.5 billion
in the second quarter, down from $81.4 billion in the first.  A shift from an
increase to a decrease in net intercompany debt investment abroad and a slowdown
in net equity capital investment abroad were partly offset by a pickup in
reinvested earnings.

        U.S. official reserve assets decreased less than $0.1 billion in the
second quarter, following an increase of $0.1 billion in the first.

Foreign-owned assets in the United States

        Foreign-owned assets in the United States increased $620.4 billion in
the second quarter, following an increase of $616.6 billion in the first.

        U.S. liabilities to foreigners reported by U.S. banks increased $137.8
billion in the second quarter, following an increase of $203.6 billion in the first.

        Transactions in U.S. Treasury securities shifted to net foreign sales
of $7.6 billion in the second quarter from net foreign purchases of $44.6
billion in the first.

        Net foreign purchases of U.S. securities other than U.S. Treasury
securities were $235.1 billion in the second quarter, up from $112.3 billion in
the first.  Net foreign purchases of U.S. stocks were $104.2 billion, up from
$43.5 billion.  Net foreign purchases of U.S. corporate bonds were $101.3
billion, down from $104.9 billion.  Transactions in federally sponsored agency
bonds shifted to net foreign purchases of $29.6 billion from net foreign sales
of $36.1 billion.

        Net financial flows for foreign direct investment in the United States were
$73.6 billion in the second quarter, up from $11.9 billion in the first.  The
increase was mostly accounted for by a shift from a decrease to an increase in
net intercompany debt investment in the United States and a pickup in net
equity capital investment in the United States.  Reinvested earnings also increased.

        Foreign official assets in the United States increased $70.1 billion in
the second quarter, following an increase of $152.2 billion in the first.

        Transactions in U.S. currency shifted to net shipments to foreign
countries of $3.3 billion in the second quarter from net shipments to the United
States of $1.6 billion in the first.

        The statistical discrepancy--errors and omissions in recorded
transactions--was a positive $40.4 billion in the second quarter, compared with
a positive $15.7 billion in the first.

        In the second quarter, the U.S. dollar depreciated 3 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 $197.1 billion
from $192.6 billion.  The goods deficit was unrevised at $200.9 billion; the
services surplus was revised to $23.3 billion from $24.1 billion; the income
surplus was revised to $7.5 billion from $10.4 billion; and unilateral current
transfers were revised to net outflows of $27.0 billion from $26.1 billion.
Net recorded financial inflows were revised to $181.9 billion from $202.8 billion.

                           *          *          *

	Release dates in 2007:

        Fourth quarter and year 2006.............March 14, 2007 (Wednesday)
        First quarter 2007...........................June 15, 2007 (Friday)
        Second quarter 2007.....................September 14, 2007 (Friday)
        Third quarter 2007.......................December 17, 2007 (Monday)

                           *          *          *

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

                    (202) 606-5306 Gross domestic product
                             -5303 Personal income and outlays

        BEA’s national, international, regional, and industry estimates; the
Survey of Current Business; and BEA news releases are available without charge
on BEA’s Web site at www.bea.gov.  By visiting the site, you can also subscribe
to receive free e-mail summaries of BEA releases and announcements.

                                                                                                                                                                         September 14, 2007


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

                                                                                                            2006                                            2007                    Change:
                              (Credits +, debits -)                                            2006                                                                                  2007
                                                                                                            I           II          III         IV          I r         II p         I-II

                                 Current account

  1 Exports of goods and services and income receipts......................................   2,096,165     494,027     518,595     532,894     550,649     558,369     586,698      28,329

  2    Exports of goods and services.......................................................   1,445,703     345,636     356,575     365,868     377,623     382,156     395,689      13,533

  3        Goods, balance of payments basis................................................   1,023,109     243,880     252,458     260,285     266,486     270,116     279,339       9,223

  4        Services........................................................................     422,594     101,756     104,117     105,583     111,137     112,040     116,350       4,310
  5            Transfers under U.S. military agency sales contracts........................      17,112       4,531       4,188       4,102       4,291       4,259       4,070        -189

  6            Travel......................................................................      85,694      20,845      21,212      21,527      22,110      22,297      23,618       1,321
  7            Passenger fares.............................................................      22,187       5,397       5,328       5,696       5,765       5,706       6,117         411
  8            Other transportation........................................................      46,297      11,038      11,754      11,716      11,789      12,157      12,791         634

  9            Royalties and license fees..................................................      62,378      14,923      15,196      15,815      16,444      16,645      16,959         314
 10            Other private services......................................................     187,771      44,745      46,153      46,433      50,441      50,680      52,507       1,827
 11            U.S. Government miscellaneous services......................................       1,155         277         286         294         297         296         289          -7

 12    Income receipts.....................................................................     650,462     148,391     162,020     167,026     173,025     176,213     191,009      14,796
 13        Income receipts on U.S.-owned assets abroad.....................................     647,582     147,670     161,293     166,314     172,305     175,484     190,276      14,792
 14            Direct investment receipts..................................................     310,224      73,304      77,702      78,372      80,846      79,478      85,819       6,341
 15            Other private receipts......................................................     334,958      73,776      83,004      87,348      90,830      95,467     103,849       8,382
 16            U.S. Government receipts....................................................       2,400         590         587         594         629         539         608          69
 17        Compensation of employees.......................................................       2,880         721         727         712         720         729         733           4

 18 Imports of goods and services and income payments......................................  -2,818,047    -673,277    -700,504    -726,352    -717,914    -728,472    -755,031     -26,559

 19    Imports of goods and services.......................................................  -2,204,225    -535,348    -549,153    -565,175    -554,549    -559,737    -573,377     -13,640

 20        Goods, balance of payments basis................................................  -1,861,380    -451,637    -463,734    -479,184    -466,825    -470,983    -483,552     -12,569

 21        Services........................................................................    -342,845     -83,711     -85,419     -85,991     -87,724     -88,754     -89,825      -1,071
 22            Direct defense expenditures.................................................     -31,054      -7,726      -7,737      -7,990      -7,601      -7,924      -8,001         -77

 23            Travel......................................................................     -72,029     -17,582     -18,077     -18,015     -18,355     -18,582     -18,661         -79
 24            Passenger fares.............................................................     -27,503      -6,748      -6,927      -6,889      -6,939      -6,799      -6,749          50
 25            Other transportation........................................................     -65,282     -16,025     -16,401     -16,491     -16,365     -16,490     -16,572         -82

 26            Royalties and license fees..................................................     -26,432      -6,767      -6,532      -6,497      -6,636      -6,810      -6,939        -129
 27            Other private services......................................................    -116,524     -27,867     -28,728     -29,087     -30,841     -31,133     -31,879        -746
 28            U.S. Government miscellaneous services......................................      -4,021        -996      -1,016      -1,022        -987      -1,016      -1,024          -8

 29    Income payments.....................................................................    -613,823    -137,929    -151,352    -161,177    -163,365    -168,735    -181,654     -12,919
 30        Income payments on foreign-owned assets in the United States....................    -604,410    -135,607    -149,004    -158,823    -160,977    -166,422    -179,238     -12,816
 31            Direct investment payments..................................................    -136,010     -31,299     -33,055     -37,885     -33,772     -31,718     -36,181      -4,463
 32            Other private payments......................................................    -334,645     -73,830     -83,037     -86,607     -91,171     -97,066    -103,628      -6,562
 33            U.S. Government payments....................................................    -133,755     -30,478     -32,912     -34,331     -36,034     -37,638     -39,429      -1,791
 34        Compensation of employees.......................................................      -9,412      -2,322      -2,348      -2,354      -2,388      -2,313      -2,416        -103

 35 Unilateral current transfers, net......................................................     -89,595     -21,360     -23,686     -23,877     -20,673     -26,994     -22,457       4,537
 36    U.S. Government grants..............................................................     -27,142      -5,671      -7,226      -7,741      -6,504     -10,372      -5,455       4,917
 37    U.S. Government pensions and other transfers........................................      -6,508      -1,614      -1,627      -1,620      -1,647      -1,700      -1,732         -32
 38    Private remittances and other transfers.............................................     -55,945     -14,075     -14,833     -14,516     -12,522     -14,922     -15,270        -348


                                                                                                                                                                         September 14, 2007
Table 1. U.S. International Transactions (Continued)
[Millions of dollars, quarters seasonally adjusted]

                                                                                                            2006                                            2007                    Change:
                              (Credits +, debits -)                                            2006                                                                                  2007
                                                                                                            I           II          III         IV          I r         II p         I-II

                                 Capital account

 39 Capital account transactions, net......................................................      -3,913      -1,724      -1,008        -545        -637        -559        -589         -30

                                Financial account

 40 U.S.-owned assets abroad, excluding financial derivatives (increase/financial
       outflow (-))........................................................................  -1,055,176    -344,032    -212,218    -209,898    -289,028    -449,454    -469,470     -20,016

 41    U.S. official reserve assets........................................................       2,374         513        -560       1,006       1,415         -72          26          98
 42        Gold............................................................................           0           0           0           0           0           0           0           0
 43        Special drawing rights..........................................................        -223         -67         -51         -54         -51         -43         -39           4
 44        Reserve position in the International Monetary Fund.............................       3,331         729        -351       1,275       1,678         212         294          82
 45        Foreign currencies..............................................................        -734        -149        -158        -215        -212        -241        -229          12

 46    U.S. Government assets, other than official reserve assets..........................       5,346       1,049       1,765       1,570         962         445        -493        -938
 47        U.S. credits and other long-term assets.........................................      -2,992      -1,517        -376        -592        -507        -608      -1,365        -757
 48        Repayments on U.S. credits and other long-term assets...........................       8,329       2,558       2,147       2,170       1,454       1,091         884        -207
 49        U.S. foreign currency holdings and U.S. short-term assets.......................           9           8          -6          -8          15         -38         -12          26

 50    U.S. private assets.................................................................  -1,062,896    -345,594    -213,423    -212,474    -291,405    -449,827    -469,003     -19,176
 51        Direct investment...............................................................    -235,358     -66,502     -53,744     -49,018     -66,094     -81,407     -71,523       9,884
 52        Foreign securities..............................................................    -289,422     -57,693     -59,003     -55,496    -117,230     -87,206     -88,051        -845
 53        U.S. claims on unaffiliated foreigners reported by U.S. nonbanking concerns.....     -83,531     -24,302     -45,885     -29,162      15,818     -47,830    -105,557     -57,727
 54        U.S. claims reported by U.S. banks, not included elsewhere......................    -454,585    -197,097     -54,791     -78,798    -123,899    -233,384    -203,872      29,512

 55 Foreign-owned assets in the United States, excluding financial derivatives
       (increase/financial inflow (+)).....................................................   1,859,597     538,140     355,442     449,987     516,029     616,602     620,405       3,803

 56    Foreign official assets in the United States........................................     440,264     125,257     120,861     108,799      85,347     152,193      70,098     -82,095
 57        U.S. Government securities......................................................     380,734     112,338      65,626     107,972      94,798     110,772      43,275     -67,497
 58            U.S. Treasury securities....................................................     189,181      65,124      24,262      52,746      47,049      37,705     -13,125     -50,830
 59            Other.......................................................................     191,553      47,214      41,364      55,226      47,749      73,067      56,400     -16,667
 60        Other U.S. Government liabilities...............................................       3,133          26         824       1,154       1,129         654        -198        -852
 61        U.S. liabilities reported by U.S. banks, not included elsewhere.................      22,040       2,394      42,533      -7,221     -15,666      29,797      15,736     -14,061
 62        Other foreign official assets...................................................      34,357      10,499      11,878       6,894       5,086      10,970      11,285         315

 63    Other foreign assets in the United States...........................................   1,419,333     412,883     234,581     341,188     430,682     464,409     550,307      85,898
 64        Direct investment...............................................................     180,580      42,976      49,056      42,979      45,570      11,906      73,620      61,714
 65        U.S. Treasury securities........................................................     -35,931     -25,274     -19,307     -13,440      22,090      44,638      -7,625     -52,263
 66        U.S. securities other than U.S. Treasury securities.............................     591,951     173,213     145,750     140,243     132,745     112,269     235,096     122,827
 67        U.S. currency...................................................................      12,571       1,933       1,127       1,129       8,382      -1,631       3,347       4,978
 68        U.S. liabilities to unaffiliated foreigners reported by U.S. nonbanking concerns     235,769      60,613      55,907      69,637      49,612      93,624     108,115      14,491
 69        U.S. liabilities reported by U.S. banks, not included elsewhere.................     434,393     159,422       2,048     100,640     172,283     203,603     137,754     -65,849

 70 Financial derivatives, net.............................................................      28,762       1,633      14,001      14,911      -1,783      14,800       n.a.      -14,800

 71 Statistical discrepancy (sum of above items with sign reversed)........................     -17,794       6,593      49,378     -37,121     -36,643      15,708      40,444      24,736

   Memoranda:
 72 Balance on goods (lines 3 and 20)......................................................    -838,271    -207,757    -211,276    -218,899    -200,339    -200,867    -204,213      -3,346
 73 Balance on services (lines 4 and 21)...................................................      79,749      18,045      18,699      19,592      23,414      23,286      26,525       3,239
 74 Balance on goods and services (lines 2 and 19).........................................    -758,522    -189,712    -192,577    -199,307    -176,926    -177,581    -177,688        -107
 75 Balance on income (lines 12 and 29)....................................................      36,640      10,462      10,668       5,850       9,661       7,478       9,355       1,877
 76 Unilateral current transfers, net (line 35)............................................     -89,595     -21,360     -23,686     -23,877     -20,673     -26,994     -22,457       4,537
 77 Balance on current account (lines 1, 18, and 35 or lines 74, 75, and 76)...............    -811,477    -200,611    -205,595    -217,334    -187,938    -197,097    -190,790       6,307

p Preliminary
r Revised
n.a. Not available

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