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U.S. International Transactions, 2nd quarter 2019

Summary:
Current Account Deficit Narrows by 5.9 Percent in Second Quarter Current Account Balance The U.S. current account deficit, which reflects the combined balances on trade in goods and services and income flows between U.S. residents and residents of other countries, narrowed by .0 billion, or 5.9 percent, to 8.2 billion in the second quarter of 2019, according to statistics from the U.S. Bureau of Economic Analysis (BEA). The revised first quarter deficit was 6.2 billion. The second quarter deficit was 2.4 percent of current dollar gross domestic product, down from 2.6 percent in the first quarter. The .0 billion narrowing of the current account deficit in the second quarter mainly reflected an expanded surplus on primary income. Current Account Transactions (tables 1-5)

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Current Account Deficit Narrows by 5.9 Percent in Second Quarter

Current Account Balance

The U.S. current account deficit, which reflects the combined balances on trade in goods and services and income flows between U.S. residents and residents of other countries, narrowed by $8.0 billion, or 5.9 percent, to $128.2 billion in the second quarter of 2019, according to statistics from the U.S. Bureau of Economic Analysis (BEA). The revised first quarter deficit was $136.2 billion.

The second quarter deficit was 2.4 percent of current dollar gross domestic product, down from 2.6 percent in the first quarter.

The $8.0 billion narrowing of the current account deficit in the second quarter mainly reflected an expanded surplus on primary income.

U.S. International Transactions, 2nd quarter 2019

Current Account Transactions (tables 1-5)

Exports of goods and services to, and income received from, foreign residents increased $2.1 billion, to $943.0 billion, in the second quarter. Imports of goods and services from, and income paid to, foreign residents decreased $5.9 billion, to $1.07 trillion.

U.S. International Transactions, 2nd quarter 2019

Trade in Goods (table 2)

Exports of goods decreased $4.5 billion, to $414.6 billion, mainly reflecting a decrease in capital goods, mostly civilian aircraft. Imports of goods increased $2.0 billion, to $637.9 billion, led by an increase in industrial supplies and materials. Changes in the other major categories were nearly offsetting.

Trade in Services (table 3)

Exports of services decreased $0.1 billion, to $207.8 billion, reflecting nearly offsetting changes across major categories. Decreases were led by travel, mainly other personal travel, and increases were led by other business services, mainly professional and management consulting services. Imports of services increased $0.2 billion, to $147.8 billion, also reflecting nearly offsetting changes across major categories. Increases were led by insurance services, mainly reinsurance, and decreases were led by transport, mostly sea freight transport.

Primary Income (table 4)

Receipts of primary income increased $7.1 billion, to $285.2 billion, mostly reflecting increases in portfolio investment income, mainly dividends on equity securities, and in direct investment income. Within direct investment income, dividends were $88.3 billion in the second quarter and remain elevated since the passage of the 2017 Tax Cuts and Jobs Act, which generally eliminated taxes on repatriated earnings beginning in 2018. For more information, see “How do the effects of the 2017 Tax Cuts and Jobs Act appear in BEA’s direct investment statistics?Payments of primary income decreased $3.7 billion, to $217.6 billion, mostly reflecting a decrease in direct investment income.

Secondary Income (table 5)

Receipts of secondary income decreased $0.3 billion, to $35.5 billion. Payments of secondary income decreased $4.5 billion, to $67.9 billion, mostly reflecting decreases in U.S. government grants and in private sector payments of fines and penalties.
 

Financial Account Transactions (tables 1, 6, 7, and 8)

Net financial account transactions were −$155.1 billion in the second quarter, reflecting net U.S. borrowing from foreign residents.

Financial Assets

Second quarter transactions increased U.S. residents’ foreign financial assets by $208.2 billion. Transactions increased direct investment assets, primarily equity, by $86.0 billion; portfolio investment assets, mainly long-term debt securities, by $38.2 billion; other investment assets, primarily currency and deposits, by $81.6 billion; and reserve assets by $2.4 billion.

Liabilities

Second quarter transactions increased U.S. liabilities to foreign residents by $354.1 billion. Transactions increased direct investment liabilities, mostly equity, by $81.2 billion; portfolio investment liabilities, both equity and debt securities, by $167.5 billion; and other investment liabilities, mostly bank deposits, by $105.5 billion.

Financial Derivatives

Net transactions in financial derivatives were −$9.2 billion in the second quarter, reflecting net borrowing from foreign residents.

Updates to First Quarter 2019 International Transactions Accounts Balances
Billions of dollars, seasonally adjusted
  Preliminary estimate Revised estimate
Current account balance −130.4 −136.2
    Goods balance −216.5 −216.7
    Services balance 61.9 60.3
    Primary income balance 61.1 56.9
    Secondary income balance −36.9 −36.6
Net financial account transactions −37.8 −36.7

New Prototype Tables

With this release of the international transactions accounts (ITAs), BEA has introduced two new tables that present: (1) geographic detail by type of transaction (ITA table 1.4) and (2) annual trade in goods and services with expanded country and geographic area detail (ITA table 1.5). These tables are released as prototypes, along with prototypes for the other standard ITA tables that reflect changes that will be introduced with the annual update in June 2020. These prototype tables are provided alongside the current standard presentation to prepare data users for the upcoming changes. The two sets of tables will be published concurrently until June 2020, when the prototype tables will replace the existing tables as the standard presentation. The prototype tables, published as addenda to the current tables, are available in BEA’s interactive data application. Additional information is available in "Prototype Tables for the International Transactions Accounts."

 

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Next release: December 19, 2019 at 8:30 A.M. EST
U.S. International Transactions, Third Quarter 2019

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Bureau of Economic Analysis
The BEA Advisory Committee advises the Director of BEA on matters related to the development and improvement of BEA’s national, regional, industry, and international economic accounts, especially in areas of new and rapidly growing economic activities arising from innovative and advancing technologies, and provides recommendations from the perspectives of the economics profession, business, and government.

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