U.S. International Transactions:
Fourth Quarter and Year 2017
Current-Account Balance, Fourth Quarter
The U.S. current-account deficit increased to $128.2 billion (preliminary) in the fourth
quarter of 2017 from $101.5 billion (revised) in the third quarter, according to statistics
released by the Bureau of Economic Analysis (BEA). The deficit was 2.6 percent of current-
dollar gross domestic product (GDP) in the fourth quarter, up from 2.1 percent in the third
quarter.
The $26.7 billion increase in the current-account deficit mostly reflected increases in the
deficits on goods and secondary income and a decrease in the surplus on primary income.
Current-Account Transactions, Fourth Quarter (tables 1-5)
Exports of goods and services and income receipts
Exports of goods and services and income receipts increased $16.6 billion in the fourth quarter
to $878.8 billion.
* Goods exports increased $14.2 billion to $400.7 billion, mostly reflecting an increase
in industrial supplies and materials, primarily petroleum and products.
* Primary income receipts increased $6.0 billion to $243.9 billion, mostly reflecting
increases in direct investment income and in portfolio investment income.
* Secondary income receipts decreased $5.9 billion to $35.3 billion, partly offsetting the
increases in goods exports and in primary income receipts. The decrease in secondary
income receipts mostly reflected a decrease in U.S. government transfers, primarily fines
and penalties.
Imports of goods and services and income payments
Imports of goods and services and income payments increased $43.3 billion to $1,006.9 billion.
* Goods imports increased $33.1 billion to $614.9 billion, mostly reflecting increases in
industrial supplies and materials, primarily petroleum and products, and in consumer
goods except food and automotive.
* Primary income payments increased $7.3 billion to $186.7 billion, primarily reflecting an
increase in direct investment income.
Capital Account, Fourth Quarter (table 1)
The balance on the capital account shifted to a deficit of less than $0.1 billion in the fourth
quarter from a surplus of $24.9 billion in the third quarter. The third-quarter transactions
reflected receipts from foreign insurance companies for losses resulting from hurricanes Harvey,
Irma, and Maria. For more information, see “What are the effects of hurricanes and other disasters
on the international economic accounts?”
Financial Account, Fourth Quarter (tables 1, 6, 7, and 8)
Net U.S. borrowing measured by financial-account transactions was $29.8 billion in the fourth
quarter, a decrease from net borrowing of $121.8 billion in the third quarter.
Financial assets
Net U.S. acquisition of financial assets excluding financial derivatives decreased $172.8
billion to $177.9 billion.
* Net U.S. acquisition of portfolio investment assets decreased $95.9 billion to $83.3
billion, reflecting a shift to net U.S. sales of foreign equity and investment fund
shares from third-quarter net purchases.
* Transactions in other investment assets shifted to net U.S. liquidation of $10.7 billion
in the fourth quarter from net acquisition of $74.7 billion in the third quarter, mostly
reflecting a shift to net foreign repayment of loans from third-quarter net U.S.
provision of loans to foreigners.
Liabilities
Net U.S. incurrence of liabilities excluding financial derivatives decreased $282.6 billion to
$208.4 billion.
* Net U.S. incurrence of portfolio investment liabilities decreased $211.5 billion to $84.9
billion, reflecting a decrease in net foreign purchases of U.S. long-term debt securities
and a shift to net foreign sales of U.S. equity and investment fund shares from third-
quarter net foreign purchases.
* Net U.S. incurrence of direct investment liabilities decreased $49.6 billion to $54.1
billion, primarily reflecting a shift to net U.S. repayment of debt instrument
liabilities from third-quarter net incurrence.
* Net U.S. incurrence of other investment liabilities decreased $21.4 billion to $69.5
billion, reflecting largely offsetting changes in transactions in loan and deposit
liabilities. In loans, transactions shifted to net U.S. repayment of loan liabilities
from third-quarter net incurrence. In deposits, transactions shifted to net incurrence of
deposit liabilities from third-quarter net foreign withdrawal of deposits in the United
States.
Financial derivatives
Transactions in financial derivatives other than reserves reflected fourth-quarter net lending
of $0.8 billion, a decrease of $17.8 billion from the third quarter.
Statistical Discrepancy, Fourth Quarter (table 1)
The statistical discrepancy was $98.4 billion in the fourth quarter, after a statistical
discrepancy of -$45.2 billion in the third quarter.
Updates to Third Quarter 2017 International Transactions Accounts Aggregates
Billions of dollars, seasonally adjusted
Preliminary estimate Revised estimate
Current-account balance -100.6 -101.5
Goods balance -195.3 -195.3
Services balance 60.9 60.0
Primary-income balance 57.0 58.5
Secondary-income balance -23.2 -24.7
Net lending (+)/borrowing (-) from
financial-account transactions -105.6 -121.8
Statistical discrepancy -29.9 -45.2
Current-Account Balance, Year 2017
The current-account deficit increased to $466.2 billion (preliminary) in 2017 from $451.7
billion in 2016. The deficit was 2.4 percent of current-dollar GDP in 2017, the same
percentage as in 2016.
The $14.6 billion increase in the deficit reflected a $58.7 billion increase in the deficit on
goods and a $4.9 billion decrease in the surplus on services that were partly offset by a $43.8
billion increase in the surplus on primary income and a $5.3 billion decrease in the deficit on
secondary income.
Current-Account Transactions, Year 2017 (tables 1-5)
Exports of goods and services and income receipts
Exports of goods and services and income receipts increased $250.9 billion in 2017 to $3,408.2
billion.
* Primary income receipts increased $112.9 billion to $926.9 billion, led by an increase in
direct investment income.
* Goods exports increased $95.0 billion to $1,550.7 billion, led by an increase in
industrial supplies and materials.
* Services exports increased $28.5 billion to $780.9 billion, led by increases in other
business services and in financial services.
Imports of goods and services and income payments
Imports of goods and services and income payments increased $265.5 billion to $3,874.4 billion.
* Goods imports increased $153.7 billion to $2,361.9 billion, led by increases in
industrial supplies and materials and in capital goods except automotive.
* Primary income payments increased $69.1 billion to $709.9 billion, led by increases in
portfolio investment income and in other investment income.
* Services imports increased $33.5 billion to $538.1 billion, led by increases in travel
(for all purposes including education) and in other business services.
Capital Account, Year 2017 (table 1)
Capital transfer receipts were $24.9 billion in 2017. The transactions reflected receipts from
foreign insurance companies for losses resulting from hurricanes Harvey, Irma, and Maria. For
more information, see “What are the effects of hurricanes and other disasters on the
international economic accounts?"
Financial Account, Year 2017 (tables 1, 6, 7, and 8)
Net U.S. borrowing measured by financial-account transactions was $349.2 billion in 2017, a
decrease from net borrowing of $377.7 billion in 2016.
Financial assets
Net U.S. acquisition of financial assets excluding financial derivatives increased $864.5
billion to $1,212.4 billion.
* Net U.S. acquisition of portfolio investment assets increased $548.9 billion to $589.5
billion, reflecting increases in net U.S. purchases of foreign debt securities and in net
purchases of foreign equity and investment fund shares.
* Transactions in other investment assets shifted to net U.S. acquisition of $200.1 billion
in 2017 from net liquidation of $6.4 billion in 2016, primarily reflecting a shift to net
U.S. acquisition of foreign deposits in 2017 from net withdrawal in 2016.
* Net U.S. acquisition of direct investment assets increased $112.8 billion to $424.4
billion, reflecting a shift to net U.S. acquisition of debt instruments in 2017 from net
foreign repayment in 2016 and an increase in net acquisition of equity assets.
Liabilities
Net U.S. incurrence of liabilities excluding financial derivatives increased $846.5 billion to
$1,587.9 billion.
* Net U.S. incurrence of portfolio investment liabilities increased $599.7 billion to
$837.1 billion, reflecting a shift to net foreign purchases of U.S. equity and investment
fund shares in 2017 from net foreign sales in 2016 and an increase in net foreign
purchases of U.S. long-term debt securities.
* Net U.S. incurrence of other investment liabilities increased $377.6 billion to $402.2
billion, reflecting a shift to net U.S. incurrence of deposit liabilities in 2017 from
net foreign withdrawal in 2016 and a shift to net U.S. incurrence of loan liabilities in
2017 from net repayment in 2016.
* Net U.S. incurrence of direct investment liabilities decreased $130.7 billion to $348.7
billion, partly offsetting the increases in net U.S. incurrence of portfolio investment
liabilities and other investment liabilities. The decrease in net U.S. incurrence of
direct investment liabilities reflected decreases in net incurrence of debt instrument
liabilities and equity liabilities.
Financial derivatives
Transactions in financial derivatives other than reserves reflected net lending of $26.4
billion in 2017, an increase of $10.5 billion from 2016.
Statistical Discrepancy, Year 2017 (table 1)
The statistical discrepancy increased $18.1 billion in 2017 to $92.2 billion.
BOX.___________________________________________________________________________________________
Notice of Upcoming Update to the U.S. International Transactions Accounts
The annual update of the U.S. international transactions accounts will be released along with
preliminary estimates for the first quarter of 2018 on June 20, 2018. An article previewing the
annual update will appear in the May 2018 issue of the Survey of Current Business.
_______________________________________________________________________________________________
Next release: June 20, 2018 at 8:30 A.M. EDT
U.S. International Transactions, First Quarter 2018 and Annual Update
* * *
U.S. International Transactions Release Dates in 2018
Fourth Quarter and Year 2017 March 21
First Quarter 2018 and Annual Update June 20
Second Quarter 2018 September 19
Third Quarter 2018 December 19
Additional Information
Resources
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* Historical time series for these estimates can be accessed in BEA’s Interactive Data
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* Access BEA data by registering for BEA’s Data Application Programming Interface (API).
* For more on BEA’s statistics, see our monthly online journal, the Survey of Current Business.
* BEA's news release schedule.
* More information on these international transactions statistics will be provided next
month in the Survey of Current Business .
* More information on the international transactions accounts (ITAs) and a description of
the estimation methods used to compile them is provided in U.S. International Economic Accounts:
Concepts and Methods.
Definitions
The current account consists of transactions between U.S. residents and nonresidents in goods,
services, primary income, and secondary income.
Goods are physical items with ownership rights that can be exchanged among institutional units
through transactions.
Services transactions consist of transactions arising from productive activities that change
the condition of the consumer or that facilitate the exchange of products and financial assets.
Primary income transactions include investment income and compensation of employees. Investment
income is the return on holdings of financial assets and includes direct investment income,
portfolio investment income, other investment income, and income on reserve assets.
Compensation of employees is income for the contribution of labor inputs to the production
process.
Secondary income consists of current transfers between residents and nonresidents. Unlike an
exchange, a transfer is a transaction in which a good, service, or asset is provided without a
corresponding return of economic value. Secondary income receipts and payments include U.S.
government and private transfers, such as U.S. government grants and pensions, fines and
penalties, withholding taxes, personal transfers (remittances), insurance-related transfers,
and other current transfers.
The capital account consists of capital transfers between residents and nonresidents and the
cross-border acquisition and disposal of nonproduced nonfinancial assets. Capital transfers
include debt forgiveness and certain disaster-related nonlife insurance claims. Nonproduced
nonfinancial assets include natural resources and contracts, leases, and licenses. Capital-
account transactions are distinguished from current-account transactions in that capital-
account transactions result in a change in the assets of one or both parties to the transaction
without affecting the income or savings of either party.
The financial account consists of transactions between U.S. residents and nonresidents for
direct investment, portfolio investment, other investment, reserves, and financial derivative
other than reserves.
Direct investment is a category of cross-border investment associated with a resident in one
economy having control or a significant degree of influence on the management of an enterprise
resident in another economy. Ownership or control of 10 percent or more of the nonresident
entity’s voting securities is the threshold for separating direct investment from other types
of investment. Direct-investment transactions include transactions in equity (including
reinvestment of earnings) and debt instruments.
Portfolio investment transactions consist of cross-border transactions involving equity and
investment fund shares and debt securities, excluding those included in direct investment or
reserve assets.
Other investment is a residual category that includes cross-border financial instruments other
than those included in direct investment, portfolio investment, financial derivatives, and
reserve assets. Other-investment transactions consist of transactions in currency and deposits,
loans, insurance technical reserves, trade credit and advances, and, for liabilities, special
drawing rights allocations.
Reserve assets are those external assets that are readily available to and controlled by
monetary authorities for meeting balance of payments financing needs, for intervention in
exchange markets to affect the currency exchange rate, and for other related purposes such as
maintaining confidence in the currency and the economy and serving as a basis for foreign
borrowing. The major published components are monetary gold, International Monetary Fund (IMF)
special drawing rights (SDRs), reserve position in the IMF, and other reserve assets.
Financial derivatives other than reserves consist of financial contracts that are linked to
underlying financial instruments, commodities, or indicators. Transactions in financial
derivatives consist of U.S. cash receipts and payments arising from the sale, purchase,
periodic settlement, or final settlement of financial derivatives contracts. Transactions in
financial derivatives are only available as a net value equal to transactions for assets less
transactions for liabilities. A positive value represents net cash payments by U.S. residents
to foreign residents from settlements of derivatives contracts (net lending) and a negative
value represents net U.S. cash receipts (net borrowing).
The statistical discrepancy is the difference between net acquisition of assets and net
incurrence of liabilities in the financial account (including financial derivatives) less the
difference between total credits and total debits recorded in the current and capital accounts.
The statistical discrepancy can also be calculated as the difference between net lending
(borrowing) measured from financial-account transactions and net lending (borrowing) measured
from current- and capital-account transactions.
The current-account balance is the difference between credits (exports and income receipts) and
debits (imports and income payments) in the current account. The balance is a net measure of
current-account transactions between the United States and the rest of the world. A positive
balance indicates a current-account surplus. A negative balance indicates a current-account
deficit.
Net lending (borrowing) measures the balance of funds supplied to the rest of the world. Net
lending means that, in net terms, the U.S. economy supplies funds to the rest of the world. Net
borrowing means the opposite. Net lending (borrowing) can be measured by current- and capital-
account transactions or by financial-account transactions. Conceptually, the two measures are
equal. In practice, the two measures differ by the statistical discrepancy.
Release and update cycle
Preliminary quarterly statistics for the ITAs are released in March, June, September, and
December approximately 80 days after the end of the reference quarter. These statistics are
updated the following quarter to incorporate new source data. Quarterly statistics are open for
revision for at least the prior three years in annual updates released in June. Preliminary
annual statistics are released in March along with statistics for the fourth quarter of the
previous year. These annual statistics are open for revision for at least the prior three years
in subsequent annual updates.
Related statistics
The ITAs constitute one part of a broader set of U.S. international economic accounts that,
taken together, provide a comprehensive, integrated, and detailed picture of U.S. international
economic activities.
The international investment position (IIP) accounts are released quarterly. Financial transactions
that are reported in the ITAs are one type of change in position that are recorded in the IIP
accounts.
Statistics on direct investment and multinational enterprises (MNEs) include annual statistics
on the activities of MNEs, detailed annual and quarterly statistics on direct investment, and
annual statistics on new investment in the United States.
Statistics on international services, released annually, include detailed annual information on
trade in services and on services supplied through the channel of direct investment by affiliates
of MNEs.
U.S. international trade in goods and services, released by BEA and the U.S. Census Bureau,
provides monthly statistics on trade in goods and services.
