News Release: U.S. International Transactions

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comprehensive restructuring of the International Economic Accounts coming in June 2014
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FOR WIRE TRANSMISSION: 8:30 A.M. EDT, WEDNESDAY, MARCH 19, 2014
BEA 14-09


Sarah P. Scott: (202) 606-9286  
U.S. International Transactions: Fourth Quarter and Year 2013


                                       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 $81.1 billion (preliminary) in
the fourth quarter from $96.4 billion (revised) in the third quarter. The deficit decreased
to 1.9 percent of current-dollar gross domestic product (GDP) from 2.3 percent in the third
quarter. The decrease in the current-account deficit reflected a decrease in the deficit on
goods and services, an increase in the surplus on income, and a decrease in net outflows of
unilateral current transfers.

______________________________________________________________________________________________

           Comprehensive Restructuring of the U.S. International Economic Accounts

On June 18, 2014, the U.S. Bureau of Economic Analysis will release "U.S. International
Transactions: First Quarter 2014 and Annual Revisions." With the June 18 release, the
statistics will be revised to reflect newly available and more complete source data, changes
in estimation methods, and changes in definitions and classifications. The earliest period
revised will be the first quarter of 1999.

With this annual revision, BEA will also introduce a new presentation of the ITAs as part of a
comprehensive restructuring of BEA's international economic accounts. This change in
presentation, combined with changes in definitions and classifications, will bring the
statistics into closer alignment with international guidelines. Additional information on
BEA's  comprehensive restructuring of the international accounts is published in the March
2014 issue of the Survey of Current Business. Table templates for the restructured
presentation, along with information on the earliest quarter and year for which statistics
will be available in each table, are available on the BEA Web site at
www.bea.gov/international/modern.htm.
______________________________________________________________________________________________



Goods and services

     The deficit on goods and services decreased to $113.9 billion in the fourth quarter from
$121.5 billion in the third.

     Goods

     The deficit on goods decreased to $171.8 billion in the fourth quarter from $178.4
billion in the third.

     Goods exports increased to $405.4 billion from $397.8 billion. Exports increased in
five of the six major end-use categories. The largest increase was in foods, feeds, and
beverages, followed by industrial supplies and materials and consumer goods. The increase in
foods, feeds, and beverages was mostly due to increased soybean exports. The increase in
industrial supplies and materials was more than accounted for by an increase in exports of
petroleum and products. The increase in consumer goods partly reflected an increase in
exports of gems, jewelry, and collectibles (table 2a).

     Goods imports increased to $577.2 billion from $576.2 billion. Imports increased in
three of the six major end-use categories. The largest increases were in capital goods and in
consumer goods. The increase in capital goods reflected increases in imports of computers,
peripherals, and parts and in civilian aircraft, engines, and parts. The increase in consumer
goods largely reflected an increase in imports of household and kitchen appliances and other
household goods. The largest decrease in goods imports was in industrial supplies and
materials, mostly reflecting a decrease in imports of petroleum and products (table 2a).

     Services

     The surplus on services increased to $57.9 billion in the fourth quarter from $56.9
billion in the third.

     Services exports increased to $173.7 billion from $170.9 billion. Exports increased
in all seven of the major services categories. The largest increases were in other private
services—primarily financial services and business, professional, and technical services—and
in travel (table 3a).

     Services imports increased to $115.8 billion from $114.0 billion. Imports increased in
six of the seven major services categories. The largest increases were in passenger fares and
in travel (table 3a).

Income

     The surplus on income increased to $64.4 billion in the fourth quarter from $59.1 billion
in the third.

     Investment income

     Income receipts on U.S.-owned assets abroad increased to $204.5 billion from $195.9
billion. The increase was primarily accounted for by an increase in direct investment
receipts. Other private receipts also increased. An example of other private receipts is
interest and dividends on U.S. holdings of foreign securities (table 4).

     Income payments on foreign-owned assets in the United States increased to $137.8 billion
from $134.6 billion. The increase was largely due to an increase in direct investment
payments. Other private payments and U.S government payments also increased. An example of
other private payments is interest and dividends on foreign holdings of U.S. securities
(table 4).

     Compensation of employees

     Receipts for compensation of U.S. residents paid by nonresidents remained at $1.7 billion
in the fourth quarter. Payments for compensation of foreign residents paid by U.S. residents
remained at $3.9 billion.

Unilateral current transfers

      Net unilateral current transfers to foreigners were $31.6 billion in the fourth quarter,
down from $34.0 billion in the third. The decrease primarily reflected a shift to net inflows
of U.S. government pensions and other transfers due to an increase in fines received by the
U.S. government. U.S. government grants decreased. Private remittances and other transfers,
which includes U.S. immigrants’ remittances to households abroad, taxes withheld on
international transactions, U.S. charitable donations to foreign residents, and transfers
between U.S. and foreign insurance companies, increased.

                                       Capital Account

      Net capital-account transactions are not available for the fourth quarter because source
data are not yet available. In the third quarter, net payments were $0.1 billion.

                                      Financial Account

      Net financial inflows were $173.7 billion in the fourth quarter, up from $68.2 billion
in the third. U.S.-owned assets abroad and foreign-owned assets in the United States both
increased more than in the third quarter; inflows of foreign-owned assets in the United States
rose more than twice as much as the outflows of U.S.-owned assets abroad. Net outflows of
financial derivatives were down from the third quarter.

U.S.-owned assets abroad

      U.S.-owned assets abroad increased $148.6 billion in the fourth quarter after increasing
$70.8 billion in the third.

      U.S. official reserve assets decreased $2.8 billion in the fourth quarter after
decreasing $1.0 billion in the third. The fourth-quarter decrease reflected a decrease in the
U.S. reserve position in the International Monetary Fund.

      U.S. government assets other than official reserve assets increased $0.6 billion in the
fourth quarter after increasing $0.1 billion in the third.

      Outflows of U.S. direct investment abroad were $87.0 billion in the fourth quarter, down
from $93.2 billion in the third. The decrease was more than accounted for by a shift of equity
investment to net inflows from net outflows in the third quarter. This shift was partly offset
by lower fourth-quarter inflows of intercompany debt and higher reinvested earnings
(table 7a).

      U.S. purchases of foreign securities exceeded sales (net purchases) by $133.5 billion in
the fourth quarter, up from $42.3 billion in the third. Net purchases of foreign stocks were
$51.1 billion, up from $22.9 billion. Net purchases of foreign bonds were $82.3 billion, up
from $19.4 billion (table 8a).

      U.S. claims on unaffiliated foreigners reported by U.S. nonbanking concerns decreased
$21.5 billion in the fourth quarter after increasing $1.1 billion in the third. An example of
these claims is deposits of U.S. nonbanks at foreign banks (table 9a).

      U.S. claims on foreigners reported by U.S. banks and securities brokers decreased $48.2
billion in the fourth quarter after decreasing $64.9 billion in the third. Examples of these
claims are deposits of U.S. banks at foreign banks and loans by U.S. banks to foreigners
(table 10a).

Foreign-owned assets in the United States

      Foreign-owned assets in the United States increased $325.0 billion in the fourth quarter
after increasing $145.6 billion in the third.

      Foreign official assets in the United States increased $97.4 billion in the fourth
quarter after increasing $66.1 billion in the third. The fourth-quarter increase was more than
accounted for by net purchases of U.S. Treasury securities.

      Inflows of foreign direct investment in the United States were $68.1 billion in the
fourth quarter, up from $54.3 billion in the third. The increase reflected higher reinvested
earnings and a shift to net inflows from net outflows of intercompany debt. These changes were
partly offset by lower net equity investment (table 7a).

      Foreign private purchases of U.S. Treasury securities exceeded sales (net purchases) by
$92.7 billion in the fourth quarter, up from net purchases of $64.8 billion in the third. The
increase in net purchases reflected a shift to net purchases of U.S. Treasury bills and
certificates that was partly offset by a decrease in net purchases of U.S. Treasury bonds and
notes (table 8a and table 11a).

      Foreign private sales of U.S. securities other than U.S. Treasury securities exceeded
purchases (net sales) by $29.4 billion in the fourth quarter, a shift from net purchases of
$127.9 billion in the third. Net sales of U.S. stocks were $61.3 billion, a shift from net
purchases of $60.8 billion. Net purchases of U.S. corporate bonds were $51.0 billion, down from
$65.3 billion. Net sales of U.S. federally sponsored agency bonds were $19.1 billion, a shift
from net purchases of $1.7 billion (table 8a).

      Net shipments of U.S. currency to foreign countries were $10.6 billion in the fourth
quarter following net shipments of $12.7 billion in the third.

      U.S. liabilities to unaffiliated foreigners reported by U.S. nonbanking concerns
decreased $2.8 billion in the fourth quarter after decreasing $60.0 billion in the third. An
example of these liabilities is loans by foreign banks to U.S. nonbanks (table 9a).

      U.S. liabilities to foreigners reported by U.S. banks and securities brokers, other than
those recorded under foreign official assets, increased $88.5 billion in the fourth quarter
after decreasing $120.2 billion in the third. Examples of these liabilities are deposits of
foreign residents at U.S. banks and loans by foreign banks to U.S. banks (table 11a).

Financial derivatives

      Net outflows of financial derivatives were $2.7 billion in the fourth quarter after net
outflows of $6.6 billion in the third.

                                  *          *          *

      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 –$92.6
billion in the fourth quarter compared with $28.3 billion in the third.

      In the fourth quarter, the U.S. dollar depreciated 1.0 percent on a trade-weighted
quarterly average basis against a group of 7 major currencies, after appreciating 0.1 percent
in the third quarter. Exchange rate data are based on Federal Reserve Statistical Release
H.10.

                                        The Year 2013

                                       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 $379.3 billion (preliminary) in 2013
from $440.4 billion in 2012. The deficit decreased to 2.3 percent of current-dollar GDP in
2013 from 2.7 percent in 2012.

Goods and services

      The deficit on goods and services decreased to $474.9 billion in 2013 from $534.7 billion
in 2012.

      Goods

      The deficit on goods decreased to $703.9 billion in 2013 from $741.5 billion in 2012.

      Goods exports increased to $1,589.7 billion from $1,561.2 billion. Exports increased in
five of the six major end-use categories. The largest increases were in capital goods,
consumer goods, and industrial supplies and materials. The increase in capital goods was more
than accounted for by an increase in exports of civilian aircraft, engines, and parts. The
increase in consumer goods was led by an increase in exports of other household goods
including cell phones. The increase in industrial supplies and materials was more than
accounted for by an increase in exports of petroleum and products (table 2a).

      Goods imports decreased to $2,293.6 billion from $2,302.7 billion despite increases in
five of the six major end-use categories. A decrease in industrial supplies and materials—
largely due to a decrease in imports of petroleum and products—was larger than the combined
increases in the other five categories. The largest increases were in imports of consumer
goods and imports of automotive vehicles, parts, and engines. The increase in imports of
consumer goods was led by an increase in other household goods including cell phones. The
increase in imports of automotive vehicles, parts, and engines was largely accounted for by an
increase in passenger cars (table 2a).

      Services

      The surplus on services increased to $229.0 billion in 2013 from $206.8 billion in 2012.

      Services exports increased to $681.7 billion from $649.3 billion. All major categories
of services exports increased, with the largest increases coming in travel and in other
private services. The increase in other private services was mostly accounted for by increases
in financial services and in business, professional, and technical services (table 3a).

      Services imports increased to $452.7 billion from $442.5 billion. Five of the seven
major categories of services imports increased. The largest increases were in other
transportation, in travel, and in other private services. The increase in other transportation
was primarily in freight services. The increase in other private services was more than
accounted for by an increase in business, professional, and technical services. The largest
decrease was in direct defense expenditures (table 3a).

Income

      The surplus on income increased to $228.8 billion in 2013 from $223.9 billion in 2012.

      Investment income

      Income receipts on U.S.-owned assets abroad increased to $782.4 billion from $770.1
billion. The increase was more than accounted for by an increase in other private receipts,
which reflected increases in receipts of both interest and dividends on U.S. holdings of
foreign securities.

      Income payments on foreign-owned assets in the United States increased to $545.0 billion
from $537.8 billion. The increase was more than accounted for by an increase in other private
payments, which reflected increases in both dividends and interest on foreign holdings of U.S.
corporate securities. U.S. government payments and direct investment payments decreased.

      Compensation of employees

      Receipts for compensation of U.S. workers paid by nonresidents increased to $6.6 billion
from $6.3 billion. Payments for compensation of foreign residents paid by U.S. residents
increased to $15.3 billion from $14.6 billion.

Unilateral current transfers

      Net unilateral current transfers to foreigners were $133.2 billion in 2013, up from
$129.7 billion in 2012. The change was more than accounted for by an increase in private
remittances and other transfers, which includes U.S. immigrants’ remittances to households
abroad, taxes withheld on international transactions, U.S. charitable donations to foreign
residents, and transfers between U.S. and foreign insurance companies.

                                       Capital Account

      Net capital account payments (outflows) were $0.4 billion in 2013, a shift from net
receipts (inflows) of $7.0 billion in 2012. The net inflows in 2012 reflected receipts from
foreign insurance companies for losses resulting from Superstorm Sandy.

                                      Financial Account

      Net financial inflows were $351.2 billion in 2013, down from $439.4 billion in 2012. In
2013, outflows of U.S.-owned assets abroad increased more than inflows of foreign-owned assets
in the United States. Outflows of financial derivatives in 2013 were down from those in 2012.

U.S.-owned assets abroad

      U.S.-owned assets abroad increased $553.0 billion in 2013 after increasing $97.5 billion
in 2012.

      U.S. official reserve assets decreased $3.1 billion in 2013 after increasing $4.5 billion
in 2012. The decrease reflected a decrease in the U.S. reserve position in the International
Monetary Fund.

      U.S. government assets other than official reserve assets decreased $2.0 billion in 2013
after decreasing $85.3 billion in 2012. The decreases in both years reflected reductions of
central bank liquidity swaps between the U.S. Federal Reserve System and foreign central banks.

      Outflows of U.S. direct investment abroad were $359.6 billion in 2013, down from $388.3
billion in 2012. The decrease reflected a shift to net inflows of intercompany debt investment
from net outflows in 2012 and a decrease in equity investment. These changes were partly offset
by an increase in reinvested earnings (table 7a).

      U.S. purchases of foreign securities exceeded sales (net purchases) by $388.9 billion in
2013, up from $144.8 billion in 2012. Net purchases of foreign stocks increased to $226.2
billion from $82.6 billion. Net purchases of foreign bonds increased to $162.7 billion from
$62.2 billion (table 8a).

      U.S. claims on unaffiliated foreigners reported by U.S. nonbanking concerns increased
$61.8 billion in 2013 after increasing $25.7 billion in 2012.

      U.S. claims on foreigners reported by U.S. banks and securities brokers decreased
$252.2 billion in 2013 after decreasing of $380.5 billion in 2012. Examples of these claims
are deposits of U.S. banks at foreign banks and loans by U.S. banks to foreigners
(table 10a).

Foreign-owned assets in the United States

      Foreign-owned assets in the United States increased $906.1 billion in 2013 after
increasing $543.9 billion in 2012.

      Foreign official assets in the United States increased $283.7 billion in 2013 after
increasing $393.9 billion in 2012. The 2013 increase was primarily accounted for by foreign
net purchases of U.S. Treasury securities.

      Inflows of foreign direct investment in the United States were $193.4 billion in 2013,
up from $166.4 billion in 2012. The increase was more than accounted for by an increase in
equity investment. This increase was partly offset by a shift to net outflows of intercompany
debt investment and a decrease in reinvested earnings (table 7a).

      Private foreign net purchases of U.S. Treasury securities were $202.2 billion in 2013,
up from $156.4 billion in 2012.

      Private foreign purchases of U.S. securities other than U.S. Treasury securities
exceeded sales (net purchases) by $44.3 billion in 2013, down from $196.9 billion in 2012. Net
sales of U.S. stocks were $71.0 billion, a shift from net purchases of $173.3 billion in 2012.
Net purchases of U.S. corporate bonds were $177.3 billion, a shift from net sales of $33.2
billion. Net sales of U.S. federally sponsored agency bonds were $62.0 billion, a shift from
net purchases of $56.7 billion (table 8a).

      Net U.S. currency shipments to foreign countries were $37.7 billion in 2013, down from
$57.1 billion in 2012.

      U.S. liabilities to unaffiliated foreigners reported by U.S. nonbanking concerns
decreased $64.8 billion in 2013 after decreasing $39.5 billion in 2012.

      U.S. liabilities to foreigners reported by U.S. banks and securities brokers (other
than foreign official assets) increased $209.5 billion in 2013 after decreasing $387.4 billion
in 2012. 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 (table 11a).

Financial derivatives

      Net outflows of financial derivatives were $1.9 billion in 2013, down from net outflows
of $7.1 billion in 2012.

                                  *          *          *

      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 $28.5 billion in
2013 compared with –$5.9 billion in 2012.

      In 2013, the U.S. dollar appreciated 3.4 percent on a trade-weighted yearly average
basis against a group of 7 major currencies. In 2012, the U.S. dollar appreciated 3.8 percent
on the same basis. Exchange rate data are based on Federal Reserve Statistical Release H.10.


                                         Revisions

      Statistics for the first three quarters of 2013 were revised to reflect revised seasonal
adjustments and, for the third quarter, new or revised source data. For the third quarter, the
current-account deficit was revised upward to $96.4 billion from $94.8 billion. The goods
deficit was revised downward to $178.4 billion from $178.6 billion. The services surplus was
revised downward to $56.9 billion from $57.9 billion. The income surplus was revised downward
to $59.1 billion from $60.0 billion. Net outflows of unilateral current transfers were
revised downward to $34.0 billion from $34.1 billion. Third-quarter net financial inflows were
revised upward to $68.2 billion from $67.3 billion. Net outflows of U.S.-owned assets abroad
were revised downward to $70.8 billion from $74.3 billion and net inflows of foreign-owned
assets in the United States were revised downward to $145.6 billion from $148.2 billion.

                                  *          *          *

      Release dates in 2014:

      Fourth Quarter and Year 2013..................................March 19, 2014 (Wednesday)
      First Quarter 2014 and Annual Revisions........................June 18, 2014 (Wednesday)
      Second Quarter 2014.......................................September 17, 2014 (Wednesday)
      Third Quarter 2014.........................................December 17, 2014 (Wednesday)

                                 *          *          *

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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
fourth-quarter statistics in this release are preliminary and will be revised on June 18,
2014. All links in the text of this release—including archived versions of this release—
refer to the latest available revised statistics.