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News Release: U.S. International Transactions

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FOR WIRE TRANSMISSION: 8:30 A.M. EDT, WEDNESDAY, March 14, 2007

Christopher Bach:        (202) 606-9545                               BEA 07-09

         U.S. International Transactions: Fourth Quarter and Year 2006

                                Fourth Quarter

                                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
$195.8 billion (preliminary) in the fourth quarter of 2006 from $229.4 billion
(revised) in the third quarter.  The decrease was mostly accounted for by a
decrease in the deficit on goods.  In addition, the surplus on services
increased, the balance on income shifted to a surplus from a deficit, and net
unilateral current transfers to foreigners decreased.

Goods and services

        The deficit on goods and services decreased to $178.6 billion in the
fourth quarter from $201.4 billion in the third.

        Goods

        The deficit on goods decreased to $197.9 billion in the fourth quarter
from $218.9 billion in the third.

        Goods exports increased to $266.6 billion from $261.3 billion.  The
increase was largely accounted for by an increase in capital goods, particularly
civilian aircraft.  Consumer goods accounted for most of the remainder of the
increase in total exports.

        Goods imports decreased to $464.6 billion from $480.2 billion.  The
decrease was more than accounted for by a large decrease in petroleum and
products.  Among nonpetroleum products, an increase in consumer goods was
partly offset by a decrease in nonpetroleum industrial supplies and materials.

        Services

        The surplus on services increased to $19.4 billion in the fourth quarter
from $17.5 billion in the third.

        Services receipts increased to $106.8 billion from $103.7 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), in travel, and in royalties and license fees.

        Services payments increased to $87.5 billion from $86.2 billion.  The
increase was largely accounted for by an increase in “other” private services.

Income

        The balance on income shifted to a surplus of $3.0 billion in the fourth
quarter from a deficit of $5.5 billion in the third.

        Investment income

        Income receipts on U.S.-owned assets abroad increased to $166.5 billion
from $158.1 billion.  The increase was almost completely accounted for by
increases in direct investment receipts and in “other” private receipts (which
consists of interest and dividends).

        Income payments on foreign-owned assets in the United States decreased
to $161.9 billion from $162.0 billion.  A decrease in direct investment payments
was virtually offset by increases in “other” private payments (which consists
of interest and dividends) and in U.S. Government payments (which consists of
interest).

        Compensation of employees

        Receipts for compensation of U.S. workers abroad were unchanged at
$0.7 billion, and payments for compensation of foreign workers in the United
States were nearly unchanged at $2.4 billion.

Unilateral current transfers

        Net unilateral current transfers to foreigners were $20.2 billion in
the fourth quarter, down from $22.5 billion in the third.  The decrease was
accounted for by decreases in private remittances and other transfers and in
U.S. Government grants.

                        Capital and Financial Account

                                Capital Account

        Net capital account payments (outflows) were virtually unchanged at
$0.6 billion in the fourth 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 $164.6 billion in the fourth quarter, down from $229.7 billion in
the third.  Net acquisitions by foreign residents slowed, and net acquisitions
by U.S. residents picked up.

U.S.-owned assets abroad

        U.S.-owned assets abroad increased $251.2 billion in the fourth quarter,
following an increase of $225.9 billion in the third.

        U.S. claims on foreigners reported by U.S. banks increased $120.7 billion
in the fourth quarter, following an increase of $84.6 billion in the third.

        Net U.S. purchases of foreign securities were a record $115.7 billion in
the fourth quarter, up from $54.4 billion in the third.  Net U.S. purchases of
foreign stocks were $60.2 billion, up from $10.3 billion.  Net U.S. purchases
of foreign bonds were $55.5 billion, up from $44.1 billion.

        U.S. direct investment abroad increased $74.2 billion in the fourth
quarter, following an increase of $65.4 billion in the third.  Pickups in net
equity capital investment abroad and in reinvested earnings were partly offset
by a shift from an increase to a decrease in net intercompany debt investment
abroad.

        U.S. official reserve assets decreased $1.4 billion in the fourth
quarter, following a decrease of $1.0 billion in the third.

Foreign-owned assets in the United States

        Foreign-owned assets in the United States increased $415.8 billion
in the fourth quarter, following an increase of $455.6 billion in the third.

        U.S. liabilities to foreigners reported by U.S. banks increased $126.7
billion in the fourth quarter, following an increase of $86.0 billion in the third.

        Transactions in U.S. Treasury securities shifted to net purchases by
foreigners of $29.7 billion in the fourth quarter from net sales by foreigners
of $4.9 billion in the third.

        Net purchases by foreigners of U.S. securities other than U.S. Treasury
securities were $144.9 billion in the fourth quarter, down from $163.0 billion
in the third.  Net purchases by foreigners of U.S. stocks were $26.4 billion,
down from $35.0 billion.  Net purchases by foreigners of U.S. corporate bonds
were $115.7 billion, up from $99.8 billion.  Net purchases by foreigners of
federally sponsored agency bonds were $2.9 billion, down from $28.1 billion.

        Foreign direct investment in the United States increased $29.4 billion
in the fourth quarter, following an increase of $61.6 billion in the third.  A
shift from an increase to a decrease in net intercompany debt investment in the
United States and a slowdown in reinvested earnings were partly offset by a
pickup in net equity capital investment in the United States.

        Foreign official assets in the United States increased $70.5 billion in
the fourth quarter, following an increase of $78.4 billion in the third.

        Net U.S. currency shipments to foreigners were $8.4 billion in the
fourth quarter, up from $1.1 billion in the third.

        The statistical discrepancy--errors and omissions in recorded
transactions--was a positive $31.8 billion in the fourth quarter, compared with
a positive $0.2 billion in the third.

        In the fourth quarter, the U.S. dollar was virtually unchanged on a
trade-weighted quarterly average basis against a group of 7 major currencies.

                                The Year 2006

                                Current Account

        The U.S. current-account deficit--the combined balances on trade in
goods and services, income, and net unilateral current transfers--increased to
$856.7 billion (preliminary) in 2006 from $791.5 billion in 2005.  The increase
was more than accounted for by an increase in the deficit on goods and a shift
from a surplus to a deficit on income.  In contrast, the surplus on services
increased, and net unilateral current transfers to foreigners decreased.

Goods and services

        The deficit on goods and services increased to $765.3 billion in 2006
from $716.7 billion in 2005.

        Goods

        The deficit on goods increased to $836.0 billion in 2006 from $782.7
billion in 2005.

        Goods exports increased to $1,023.7 billion from $894.6 billion.  The
increase was mostly accounted for by increases in capital goods and in
industrial supplies and materials.

        Goods imports increased to $1,859.7 billion from $1,677.4 billion.
The largest increase was in petroleum and products.  Capital goods, consumer
goods, and nonpetroleum industrial supplies and materials also contributed to
the increase in total imports.

        Services

        The surplus on services increased to $70.7 billion in 2006 from $66.0
billion in 2005.

        Services receipts increased to $413.1 billion from $380.6 billion.
More than half of the increase was accounted for by an increase in “other”
private services (such as business, professional, and technical services,
insurance services, and financial services).  The next largest increases were
in “other” transportation (such as freight and port services), in royalties
and license fees, and in travel.

        Services payments increased to $342.4 billion from $314.6 billion.  More
than half of the increase was accounted for by an increase in “other” private
services.  All other services categories also increased.

Income

        The balance on income shifted to a deficit of $7.3 billion in 2006
from a surplus of $11.3 billion in 2005.

        Investment income

        Income receipts on U.S.-owned assets abroad increased to $619.1 billion
from $471.7 billion.  The increase was largely accounted for by an increase in
“other” private receipts (which consists of interest and dividends).  Direct
investment receipts also increased.

        Income payments on foreign-owned assets in the United States increased
to $619.9 billion from $454.1 billion.  The increase was mostly accounted for
by an increase in “other” private payments (which consists of interest and
dividends).  U.S. Government payments (which consists of interest) and direct
investment payments also increased.

        Compensation of employees

        Receipts for compensation of U.S. workers abroad were unchanged at
$2.9 billion, and payments for compensation of foreign workers in the United
States increased to $9.4 billion from $9.2 billion.

Unilateral current transfers

        Net unilateral current transfers to foreigners were $84.1 billion in
2006, down from $86.1 billion in 2005.  A decrease in U.S. Government grants
was largely offset by an increase in private remittances and other transfers.

                        Capital and Financial Account

                                Capital Account

        Net capital account payments (outflows) were $3.9 billion in 2006, down
from $4.4 billion in 2005.

                                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 $719.1 billion in 2006, down from $785.4 billion in 2005.  Net acquisitions
by U.S. residents strengthened more than net acquisitions by foreign residents.

U.S.-owned assets abroad

        U.S.-owned assets abroad increased $1,045.8 billion in 2006, following
an increase of $426.8 billion in 2005.

        U.S. claims on foreigners reported by U.S. banks increased $482.4
billion in 2006, following an increase of $213.0 billion in 2005.

        Net U.S. purchases of foreign securities were a record $277.7 billion in
2006, up from $180.1 billion in 2005.  Net U.S. purchases of foreign stocks were
$128.5 billion, down from $142.1 billion.  Net U.S. purchases of foreign bonds
were a record $149.2 billion, up from $38.0 billion.

        U.S. direct investment abroad increased $248.9 billion in 2006, following
an increase of $9.1 billion in 2005.  The pickup was mostly accounted for by a
large shift from a decrease to an increase in reinvested earnings.  (Reinvested
earnings were significantly affected in 2005 by tax incentives provided by the
American Jobs Creation Act of 2004.)  Net intercompany debt investment abroad
decreased less in 2006 than in 2005, and net equity capital investment abroad
picked up.

        U.S. official reserve assets decreased $2.4 billion in 2006, following
a decrease of $14.1 billion in 2005.

Foreign-owned assets in the United States

        Foreign-owned assets in the United States increased $1,764.9 billion
in 2006, following an increase of $1,212.3 billion in 2005.

        U.S. liabilities to foreigners reported by U.S. banks increased $441.2
billion in 2006, following an increase of $179.8 billion in 2005.

        Net purchases by foreigners of U.S. Treasury securities were $29.4
billion in 2006, down from $199.5 billion in 2005.

        Net purchases by foreigners of U.S. securities other than U.S. Treasury
securities were a record $621.2 billion in 2006, up from $474.1 billion in 2005.
Net purchases by foreigners of U.S. stocks were $114.0 billion, up from $85.8
billion.  Net purchases by foreigners of U.S. corporate bonds were a record
$406.3 billion, up from $316.0 billion.  Net purchases by foreigners of federally
sponsored agency bonds were $100.9 billion, up from $72.4 billion.

        Foreign direct investment in the United States increased $183.6 billion
in 2006, following an increase of $109.8 billion in 2005.  The pickup resulted
from a shift from a decrease to an increase in net intercompany debt investment
in the United States and pickups in reinvested earnings and in net equity
capital investment in the United States.

        Foreign official assets in the United States increased $300.5 billion
in 2006, following an increase of $199.5 billion in 2005.

        Net U.S. currency shipments to foreigners were $12.6 billion in 2006,
down from $19.4 billion in 2005.

        The statistical discrepancy--errors and omissions in recorded
transactions--was a positive $141.4 billion in 2006, compared with a positive
$10.4 billion in 2005.

        In 2006, the U.S. dollar depreciated 1 percent on a trade-weighted yearly
average basis against a group of 7 major currencies.


                                Revisions

        The first three quarters of 2006 were revised to reflect revised seasonal
adjustments and, for the third quarter, receipt of new or revised data.
Revisions to the first and second quarters were small.  In the third quarter,
the current-account deficit was revised to $229.4 billion from $225.6 billion.
The goods deficit was revised to $218.9 billion from $218.6 billion; the
services surplus was revised to $17.5 billion from $18.3 billion; the deficit
on income was revised to $5.5 billion from $3.8 billion; and net unilateral
current transfers to foreigners were revised to $22.5 billion from $21.5 billion.
Net financial inflows were revised to $229.7 billion from $176.4 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.

                                                                                                                                                                              March 14, 2007


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

                                                                                                            Change:       2005       2006                                             Change:
                              (Credits +, debits -)                                 2005        2006 p      2005-2006                                                                  2006
                                                                                                                          IV         I r         II r       III r        IV p         III-IV

                                 Current account

  1 Exports of goods and services and income receipts............................   1,749,892   2,058,836     308,944     462,357     483,338     510,923     523,832     540,741      16,909

  2    Exports of goods and services.............................................   1,275,245   1,436,816     161,571     331,165     343,445     354,951     364,947     373,472       8,525

  3        Goods, balance of payments basis......................................     894,631   1,023,689     129,058     232,904     243,726     252,057     261,283     266,623       5,340

  4        Services..............................................................     380,614     413,127      32,513      98,261      99,719     102,894     103,664     106,849       3,185
  5            Transfers under U.S. military agency sales contracts..............      19,038      16,682      -2,356       4,446       4,453       4,226       4,022       3,982         -40

  6            Travel............................................................      81,680      85,697       4,017      20,374      20,774      21,475      21,334      22,114         780
  7            Passenger fares...................................................      20,931      22,060       1,129       5,371       5,500       5,230       5,598       5,731         133
  8            Other transportation..............................................      42,245      48,208       5,963      11,244      11,572      12,185      12,206      12,245          39

  9            Royalties and license fees........................................      57,410      62,051       4,641      14,923      14,968      15,495      15,556      16,033         477
 10            Other private services............................................     158,223     177,284      19,061      41,643      42,175      43,997      44,654      46,457       1,803
 11            U.S. Government miscellaneous services............................       1,087       1,145          58         260         277         286         294         287          -7

 12    Income receipts...........................................................     474,647     622,020     147,373     131,192     139,893     155,972     158,885     167,269       8,384
 13        Income receipts on U.S.-owned assets abroad...........................     471,722     619,085     147,363     130,437     139,165     155,246     158,147     166,526       8,379
 14            Direct investment receipts........................................     251,370     295,884      44,514      67,481      68,676      74,868      74,075      78,264       4,189
 15            Other private receipts............................................     217,637     320,796     103,159      62,279      69,923      79,759      83,537      87,577       4,040
 16            U.S. Government receipts..........................................       2,715       2,405        -310         677         566         619         535         685         150
 17        Compensation of employees.............................................       2,925       2,935          10         755         728         726         738         743           5

 18 Imports of goods and services and income payments............................  -2,455,328  -2,831,369    -376,041    -659,290    -677,571    -706,776    -730,711    -716,311      14,400

 19    Imports of goods and services.............................................  -1,991,975  -2,202,083    -210,108    -525,939    -535,091    -548,584    -566,346    -552,063      14,283

 20        Goods, balance of payments basis......................................  -1,677,371  -1,859,655    -182,284    -445,410    -451,974    -462,937    -480,175    -464,569      15,606

 21        Services..............................................................    -314,604    -342,428     -27,824     -80,529     -83,117     -85,647     -86,171     -87,494      -1,323
 22            Direct defense expenditures.......................................     -30,062     -31,180      -1,118      -7,503      -7,692      -7,740      -8,002      -7,746         256

 23            Travel............................................................     -69,175     -73,299      -4,124     -17,135     -17,662     -18,667     -18,409     -18,561        -152
 24            Passenger fares...................................................     -26,066     -27,306      -1,240      -6,644      -6,753      -6,952      -6,671      -6,930        -259
 25            Other transportation..............................................     -62,107     -65,611      -3,504     -16,150     -16,196     -16,341     -16,605     -16,469         136

 26            Royalties and license fees........................................     -24,501     -26,523      -2,022      -6,261      -6,764      -6,537      -6,551      -6,671        -120
 27            Other private services............................................     -98,714    -114,485     -15,771     -25,845     -27,054     -28,394     -28,910     -30,127      -1,217
 28            U.S. Government miscellaneous services............................      -3,979      -4,024         -45        -991        -996      -1,016      -1,022        -990          32

 29    Income payments...........................................................    -463,353    -629,286    -165,933    -133,351    -142,480    -158,192    -164,365    -164,248         117
 30        Income payments on foreign-owned assets in the United States..........    -454,124    -619,862    -165,738    -131,018    -140,132    -155,845    -162,016    -161,868         148
 31            Direct investment payments........................................    -116,953    -145,561     -28,608     -34,839     -34,443     -36,865     -39,828     -34,424       5,404
 32            Other private payments............................................    -223,612    -329,231    -105,619     -64,857     -72,813     -82,539     -84,833     -89,046      -4,213
 33            U.S. Government payments..........................................    -113,559    -145,070     -31,511     -31,322     -32,876     -36,441     -37,355     -38,398      -1,043
 34        Compensation of employees.............................................      -9,229      -9,424        -195      -2,333      -2,348      -2,347      -2,349      -2,380         -31

 35 Unilateral current transfers, net............................................     -86,072     -84,122       1,950     -26,176     -19,545     -21,860     -22,498     -20,220       2,278
 36    U.S. Government grants....................................................     -31,362     -21,410       9,952      -9,091      -4,631      -5,341      -6,040      -5,398         642
 37    U.S. Government pensions and other transfers..............................      -6,303      -7,009        -706      -1,592      -1,742      -1,755      -1,749      -1,763         -14
 38    Private remittances and other transfers...................................     -48,407     -55,703      -7,296     -15,493     -13,172     -14,764     -14,709     -13,059       1,650


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

                                                                                                            Change:       2005       2006                                             Change:
                              (Credits +, debits -)                                 2005        2006 p      2005-2006                                                                  2006
                                                                                                                          IV         I r         II r       III r        IV p         III-IV

                          Capital and financial account

                                 Capital account

 39 Capital account transactions, net............................................      -4,351      -3,914         437        -514      -1,756      -1,003        -551        -604         -53

                                Financial account

 40 U.S.-owned assets abroad, net (increase/financial outflow (-))...............    -426,801  -1,045,760    -618,959     -10,656    -356,654    -211,969    -225,888    -251,249     -25,361

 41    U.S. official reserve assets, net.........................................      14,096       2,374     -11,722       4,796         513        -560       1,006       1,415         409
 42        Gold..................................................................        ....       .....        ....        ....        ....        ....        ....        ....        ....
 43        Special drawing rights................................................       4,511        -223      -4,734         -81         -67         -51         -54         -51           3
 44        Reserve position in the International Monetary Fund...................      10,200       3,331      -6,869       5,050         729        -351       1,275       1,678         403
 45        Foreign currencies....................................................        -615        -734        -119        -173        -149        -158        -215        -212           3

 46    U.S. Government assets, other than official reserve assets, net...........       5,539       5,219        -320         459       1,049       1,765       1,570         835        -735
 47        U.S. credits and other long-term assets...............................      -2,255      -2,990        -735        -509      -1,517        -376        -592        -505          87
 48        Repayments on U.S. credits and other long-term assets.................       5,603       8,223       2,620         977       2,558       2,147       2,170       1,348        -822
 49        U.S. foreign currency holdings and U.S. short-term assets, net........       2,191         -14      -2,205          -9           8          -6          -8          -8        ....

 50    U.S. private assets, net..................................................    -446,436  -1,053,353    -606,917     -15,911    -358,216    -213,174    -228,464    -253,499     -25,035
 51        Direct investment.....................................................      -9,072    -248,856    -239,784      25,799     -61,927     -47,363     -65,395     -74,171      -8,776
 52        Foreign securities....................................................    -180,125    -277,691     -97,566     -47,266     -53,692     -53,915     -54,391    -115,693     -61,302
 53        U.S. claims on unaffiliated foreigners reported by
               U.S. nonbanking concerns..........................................     -44,221     -44,434        -213      -4,812     -46,190     -31,199     -24,096      57,051      81,147
 54        U.S. claims reported by U.S. banks, not included elsewhere............    -213,018    -482,372    -269,354      10,368    -196,407     -80,697     -84,582    -120,686     -36,104

 55 Foreign-owned assets in the United States, net (increase/financial inflow (+))  1,212,250   1,764,909     552,659     253,350     527,923     365,543     455,598     415,845     -39,753

 56    Foreign official assets in the United States, net.........................     199,495     300,510     101,015      71,934      75,697      75,869      78,434      70,510      -7,924
 57        U.S. Government securities............................................     156,450     243,794      87,344      61,204      66,219      21,553      77,978      78,044          66
 58            U.S. Treasury securities..........................................      71,749     118,344      46,595      37,418      42,156      -8,905      45,044      40,049      -4,995
 59            Other.............................................................      84,701     125,450      40,749      23,786      24,063      30,458      32,934      37,995       5,061
 60        Other U.S. Government liabilities.....................................        -488       3,274       3,762        -255          37         724       1,153       1,360         207
 61        U.S. liabilities reported by U.S. banks, not included elsewhere.......      24,275      19,550      -4,725       5,078        -821      42,241      -7,470     -14,400      -6,930
 62        Other foreign official assets.........................................      19,258      33,892      14,634       5,907      10,262      11,351       6,773       5,506      -1,267

 63    Other foreign assets in the United States, net............................   1,012,755   1,464,399     451,644     181,416     452,226     289,674     377,164     345,335     -31,829
 64        Direct investment.....................................................     109,754     183,571      73,817      26,510      45,693      46,810      61,633      29,435     -32,198
 65        U.S. Treasury securities..............................................     199,491      29,417    -170,074      62,041      -5,212       9,784      -4,899      29,744      34,643
 66        U.S. securities other than U.S. Treasury securities...................     474,140     621,154     147,014     131,871     186,009     127,285     162,953     144,907     -18,046
 67        U.S. currency.........................................................      19,416      12,570      -6,846       9,158       1,932       1,127       1,129       8,382       7,253
 68        U.S. liabilities to unaffiliated foreigners reported by
               U.S. nonbanking concerns..........................................      30,105     176,509     146,404     -50,305      74,953      25,082      70,331       6,143     -64,188
 69        U.S. liabilities reported by U.S. banks, not included elsewhere.......     179,849     441,178     261,329       2,141     148,851      79,586      86,017     126,724      40,707

 70 Statistical discrepancy (sum of above items with sign reversed)..............      10,410     141,419     131,009     -19,071      44,265      65,142         218      31,798      31,580

    Memoranda:
 71 Balance on goods (lines 3 and 20)............................................    -782,740    -835,966     -53,226    -212,506    -208,248    -210,880    -218,892    -197,946      20,946
 72 Balance on services (lines 4 and 21).........................................      66,011      70,699       4,688      17,733      16,602      17,247      17,493      19,355       1,862
 73 Balance on goods and services (lines 2 and 19)...............................    -716,730    -765,267     -48,537    -194,774    -191,646    -193,633    -201,399    -178,591      22,808
 74 Balance on income (lines 12 and 29)..........................................      11,293      -7,266     -18,559      -2,159      -2,587      -2,220      -5,480       3,021       8,501
 75 Unilateral current transfers, net (line 35)..................................     -86,072     -84,122       1,950     -26,176     -19,545     -21,860     -22,498     -20,220       2,278
 76 Balance on current account (lines 1, 18, and 35 or lines 73, 74, and 75).....    -791,508    -856,655     -65,147    -223,109    -213,778    -217,713    -229,377    -195,790      33,587

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