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U.S. International Transactions, 2nd Quarter 2020

Summary:
Current Account Balance, Second Quarter 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, widened by .0 billion, or 52.9 percent, to 0.5 billion in the second quarter of 2020, according to statistics from the U.S. Bureau of Economic Analysis (BEA). The revised first quarter deficit was 1.5 billion. The second quarter deficit was 3.5 percent of current dollar gross domestic product, up from 2.1 percent in the first quarter. The .0 billion widening of the current account deficit in the second quarter mostly reflected an expanded deficit on goods and reduced surpluses on primary income and on services. Coronavirus (COVID-19) Impact on Second Quarter

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Current Account Balance, Second Quarter

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, widened by $59.0 billion, or 52.9 percent, to $170.5 billion in the second quarter of 2020, according to statistics from the U.S. Bureau of Economic Analysis (BEA). The revised first quarter deficit was $111.5 billion.

The second quarter deficit was 3.5 percent of current dollar gross domestic product, up from 2.1 percent in the first quarter.

The $59.0 billion widening of the current account deficit in the second quarter mostly reflected an expanded deficit on goods and reduced surpluses on primary income and on services.

U.S. International Transactions, 2nd Quarter 2020

Coronavirus (COVID-19) Impact on Second Quarter 2020 International Transactions

All major categories of current account transactions declined in the second quarter of 2020 resulting in part from the impact of COVID-19, as many businesses were operating at limited capacity or ceased operations completely, and the movement of travelers across borders was restricted. In the financial account, the ending of some currency swaps between the U.S. Federal Reserve System and some central banks in Europe and Japan contributed to U.S. withdrawal of deposit assets and U.S. repayment of deposit liabilities. The full economic effects of the COVID-19 pandemic cannot be quantified in the statistics because the impacts are generally embedded in source data and cannot be separately identified. For more information on the impact of COVID-19 on the statistics, see the technical note that accompanies this release.

Current Account Transactions (tables 1-5)

Exports of goods and services to, and income received from, foreign residents decreased $209.3 billion, to $688.0 billion, in the second quarter. Imports of goods and services from, and income paid to, foreign residents decreased $150.2 billion, to $858.5 billion.

U.S. International Transactions, 2nd Quarter 2020

Trade in Goods (table 2)

Exports of goods decreased $114.6 billion, to $288.9 billion, mostly reflecting decreases in industrial supplies and materials, mainly petroleum and products; in capital goods, mainly civilian aircraft, engines, and parts; and in automotive vehicles, parts, and engines, mainly parts and engines and passenger cars. Imports of goods decreased $87.1 billion, to $508.2 billion, mostly reflecting decreases in automotive vehicles, parts, and engines, mainly parts and engines and passenger cars, and in industrial supplies and materials, mostly petroleum and products.

Trade in Services (table 3)

Exports of services decreased $46.3 billion, to $155.8 billion, and imports of services decreased $35.4 billion, to $101.3 billion. The decreases in both exports and imports mostly reflected decreases in travel, primarily other personal travel, and in transport, primarily air passenger transport.

Primary Income (table 4)

Receipts of primary income decreased $47.1 billion, to $209.4 billion, mostly reflecting decreases in portfolio investment income, primarily income on equity securities, and in direct investment income, primarily earnings. Payments of primary income decreased $24.3 billion, to $180.2 billion, reflecting decreases in all components, led by other investment income, primarily interest on loans and deposits.

Secondary Income (table 5)

Receipts of secondary income decreased $1.2 billion, to $33.9 billion, mostly reflecting a decrease in private transfers, primarily private sector fines and penalties. Payments of secondary income decreased $3.4 billion, to $68.8 billion, reflecting decreases in private transfers, primarily private sector fines and penalties, and in general government transfers, primarily international cooperation.

Capital Account Transactions (table 1)

Capital transfer payments decreased $1.9 billion, to $1.1 billion, in the second quarter, mostly reflecting a decrease in investment grants.

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

Net financial account transactions were −$82.6 billion in the second quarter, reflecting net U.S. borrowing from foreign residents.

Financial Assets (tables 1, 6, 7, and 8)

Second quarter transactions decreased U.S. residents’ foreign financial assets by $147.6 billion. Transactions decreased portfolio investment assets by $29.8 billion, primarily equity securities, and other investment assets, mostly deposits, by $158.6 billion. Transactions in deposits included a net withdrawal by the U.S. Federal Reserve of $130.8 billion from deposits abroad. Transactions increased direct investment assets, primarily equity, by $35.9 billion, and reserve assets by $5.0 billion.

Liabilities (tables 1, 6, 7, and 8)

Second quarter transactions decreased U.S. liabilities to foreign residents by $4.8 billion. Transactions decreased direct investment liabilities, mainly debt instruments, by $8.5 billion and other investment liabilities, mostly deposits, by $335.2 billion. Foreign banks withdrew $213.0 billion of their deposits in U.S. banks. Transactions increased portfolio investment liabilities, mainly short-term U.S. Treasury securities, by $339.0 billion.

Financial Derivatives (table 1)

Net transactions in financial derivatives were $60.3 billion in the second quarter, reflecting net lending to foreign residents.

Updates to First Quarter 2020 International Transactions Accounts Balances

Billions of dollars, seasonally adjusted
  Preliminary estimate Revised estimate
Current account balance -104.2 −111.5
    Goods balance −192.3 −191.7
    Services balance 73.3 65.3
    Primary income balance 52.5 52.0
    Secondary income balance −37.6 −37.1
Net financial account transactions −201.1 −143.1

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Next release: December 18, 2020 at 8:30 A.M. EST
U.S. International Transactions, Third Quarter 2020

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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