U.S. international transactions: fourth quarter of 2007.

Nguyen, Elena L. ; Hanson, Jessica Melton

THE U.S. current-account deficit--the combined balances on trade in goods and services, income, and net unilateral current transfers--decreased to $172.9 billion (preliminary) in the fourth quarter of 2007 from $177.4 billion (revised) in the third quarter (table A, chart 1). (1) The decrease resulted from increases in the surpluses on income and on services. In contrast, both the deficit on goods and net unilateral current transfers to foreigners increased.

In the 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 $230.1 billion in the fourth quarter, up from $111.1 billion in the third quarter. Net acquisitions by foreign residents picked up, and net acquisitions by U.S. residents slowed.

The statistical discrepancy--errors and omissions in recorded transactions--was a negative $56.6 billion in the fourth quarter, compared with a positive $67.0 billion in the third quarter.

The following are highlights for the fourth quarter of 2007:

* The deficit on goods and services increased as a result of an increase in the deficit on goods.

* Imports of petroleum and products increased very strongly, and imports of nonpetroleum products decreased. Exports of goods increased much more moderately in the fourth quarter than in the third quarter.

* Income payments decreased substantially, mostly as a result of a sharp decline in income payments on foreign direct investment in the United States.

* Net private foreign transactions in U.S. securities other than U.S. Treasury securities shifted to net purchases from net sales. In contrast, net U.S. purchases of foreign securities fell sharply.

* U.S. direct investment abroad picked up considerably, and foreign direct investment in the United States slowed considerably.

* Foreign official assets in the United States increased much more in the fourth quarter than in the third quarter.

Current Account

Goods and services

The deficit on goods and services increased to $177.9 billion in the fourth quarter from $172.6 billion in the third quarter. A $7.5 billion increase in the deficit on goods was partly offset by a $2.2 billion increase in the surplus on services.

[GRAPHIC 1 OMITTED]

Goods

The deficit on goods increased to $208.1 billion in the fourth quarter from $200.5 billion in the third quarter, as imports increased more than exports (chart 2). The deficit on petroleum and products increased strongly as a result of a much larger increase in petroleum imports than in exports (chart 3). In contrast, the deficit on nonpetroleum products decreased for the fifth consecutive quarter.

On a price-adjusted, or real, basis, total exports increased and total imports decreased in the fourth quarter. As a result, real net goods exports contributed substantially to real gross domestic product growth for the fourth time in the last five quarters.

Exports. In the fourth quarter, current-dollar exports of goods increased $7.2 billion, or 2.4 percent, to $304.3 billion (table B, chart 2). Real exports increased 0.9 percent, and export prices increased 1.5 percent. (2) The increase in value was largely accounted for by increases in nonagricultural industrial supplies and materials and in capital goods.

Nonagricultural industrial supplies and materials increased $3.9 billion. Two-thirds of the increase was accounted for by petroleum and products, particularly fuel oil, whose price increased 16 percent. Chemicals continued to rise, but the fourth-quarter increase was smaller than the increases in recent quarters. Steelmaking materials and paper and related stocks also increased.

[GRAPHIC 2 OMITTED]

Capital goods increased $3.0 billion. More than half of the increase was accounted for by civilian aircraft, engines, and parts. Among other capital goods, exports of industrial engines, pumps, and compressors surged, mainly to Saudi Arabia, and semiconductors rebounded after decreasing for five consecutive quarters. In contrast, computers, peripherals, and parts decreased for the third time in the last four quarters. Most other commodity categories either decreased or increased much less than in the third quarter.

[GRAPHIC 3 OMITTED]

Agricultural products increased $0.2 billion after much larger increases in the previous two quarters. In the fourth quarter, increases in grains and preparations and in "other" agricultural foods, feeds, and beverages were largely offset by decreases in raw cotton and soybeans. Among grains and preparations, exports of wheat and corn continued to be supported by shortages in the world supply of these commodities.

Automotive vehicles, parts, and engines decreased $0.7 billion. The decrease was more than accounted for by a decline in parts and engines. In contrast, exports of passenger cars, mainly to Saudi Arabia and Mexico, and of trucks, buses, and special purpose vehicles, mainly to Canada, increased.

Consumer goods decreased $0.1 billion. A large drop in nondurable goods--mostly medicinal, dental, and pharmaceutical preparations to Europe--was almost completely offset by increases in durable goods and in unmanufactured goods, such as gemstones.

Imports. Imports of goods increased $14.7 billion, or 2.9 percent, to $512.3 billion (table B, chart 2). Real imports decreased 0.4 percent, and import prices increased 3.3 percent. The increase in value was more than accounted for by a surge in petroleum and products. In contrast, nonpetroleum products decreased for the first time since the fourth quarter of 2001.

Petroleum and products increased $17.9 billion, or 22 percent, as a result of increases in petroleum prices and in the average number of barrels imported daily. The average price per barrel rose 14 percent, to $80.34 in the fourth quarter from $70.31 in the third quarter. The average number of barrels imported daily increased to 13.55 million from 12.73 million. The largest increases in imports were from members of OPEC, particularly Nigeria, Venezuela, and Saudi Arabia.

[GRAPHIC 4 OMITTED]

Consumer goods increased $2.7 billion. The largest increase was in durable goods, which resulted from strong increases in televisions and video receivers and in toys, shooting, and sporting goods. Nondurable goods rebounded after declining for two quarters. Among nondurable goods, a sharp increase in medical, dental, and pharmaceutical products more than offset decreases in textile apparel and household goods and in footwear. Unmanufactured consumer goods, such as gemstones, also increased strongly.

Capital goods increased $0.5 billion. Telecommunications equipment increased strongly for the third time in the last four quarters. Computers, peripherals, and parts rebounded after decreasing for two consecutive quarters. In contrast, both electric generating machinery and oil drilling, mining, and construction machinery decreased substantially.

Nonpetroleum industrial supplies and materials decreased $4.7 billion. The decrease largely reflected declines in natural gas, in metals and nonmetallic products, and in building materials. Natural gas fell as a result of a decrease in import volume; natural gas prices increased 16 percent. Among metals and nonmetallic products, all types of nonferrous metals decreased, but nonmonetary gold declined the most by far. Iron and steel products also decreased substantially. Building products have decreased over the last year and a half as the U.S. residential construction industry has weakened.

Automotive vehicles, parts, and engines decreased $1.7 billion. The decrease largely resulted from declines in imports of trucks, buses, and special purpose vehicles, mostly from Mexico, and of "other" parts and accessories, mostly from Mexico, China, and the Republic of Korea.

Foods, feeds, and beverages decreased $0.2 billion. The decrease mostly reflected a decline in imports of fish and shellfish from Canada.

Balances by area. The goods deficit increased $7.5 billion in the fourth quarter to $208.1 billion. The deficit with Latin America and Other Western Hemisphere increased $4.7 billion as a result of increases in the deficits with Mexico and Venezuela. The deficit with Africa increased $3.5 billion because of a rise in the deficit with Nigeria. The deficit with Europe increased $2.2 billion. In contrast, the deficit with Asia and Pacific decreased $4.0 billion, largely because of a decrease in the deficit with China.

Services

The surplus on services increased to $30.2 billion in the fourth quarter from $28.0 billion in the third quarter. Services receipts increased $5.4 billion to $128.0 billion, and services payments increased $3.2 billion to $97.8 billion.

Travel receipts increased $1.6 billion to $26.8 billion. The rise was accounted for by increases in receipts from visitors to the United States from overseas, Canada, and Mexico. The number of foreign visitors has increased in recent quarters, partly in response to the appreciation of many foreign currencies against the U.S. dollar. Travel payments increased $0.3 billion to $19.7 billion. The rise was mostly accounted for by an increase in payments by U.S. travelers to countries overseas.

Passenger fare receipts increased $0.3 billion to $6.9 billion, and passenger fare payments increased $0.3 billion to $7.6 billion.

"Other" transportation receipts increased $0.9 billion to $13.9 billion. The increase was the largest in several quarters and resulted from increases in receipts for port and freight services. The rise in port services partly reflected foreign carriers' increased fuel expenditures in U.S. ports. "Other" transportation payments increased $0.4 billion to $17.3 billion. The increase resulted from a rise in payments for port services, partly reflecting U.S. air carriers' increased fuel expenditures in foreign air ports.

"Other" private services receipts increased $2.4 billion to $57.6 billion. The largest increases were in receipts for business, professional, and technical services and for financial services. "Other" private services payments increased $1.5 billion to $36.3 billion. The largest increases were in payments for affiliated services, for insurance services, for business, professional, and technical services, and for financial services.

Income

The surplus on income increased to $33.0 billion in the fourth quarter from $21.3 billion in the third quarter. Income receipts decreased $2.2 billion to $204.3 billion, and income payments decreased $13.8 billion to $171.3 billion.

Receipts of income on U.S. direct investment abroad increased $2.3 billion to $94.2 billion. The increase mostly resulted from higher earnings of foreign affiliates in "other" industries and in holding companies. The increase in "other" industries was largely due to higher earnings of oil and gas extraction affiliates. Holding companies' earnings increased the most in Europe.

Payments of income on foreign direct investment in the United States decreased $11.1 billion to $24.7 billion. The sharp drop was largely accounted for by a shift from profits to losses by U.S. finance and insurance affiliates, mostly depository institutions. Many depository institutions experienced earnings declines or losses, mainly as a result of unsettled credit market conditions. Earnings of U.S. affiliates in wholesale trade and in "other" industries also decreased.

Both receipts and payments of income on other financial assets decreased, largely as a result of lower yields. Receipts of "other" private income decreased $4.5 billion to $108.8 billion. The decline was attributable to decreases in income receipts on U.S. bank and nonbank claims; income receipts on U.S. holdings of foreign securities increased. U.S. government income receipts were virtually unchanged at $0.5 billion.

Payments of "other" private income decreased $3.4 billion to $103.6 billion. The decrease was attributable to decreases in income payments on U.S. bank and nonbank liabilities; income payments on foreign holdings of U.S. securities other than U.S. Treasury securities increased. U.S. government income payments increased $0.7 billion to $40.4 billion.

Unilateral current transfers

Net unilateral current transfers to foreigners were $28.1 billion in the fourth quarter, up from $26.2 billion in the third quarter. An increase in U.S. government grants was partly offset by a decrease in private remittances and other transfers.

Capital Account

Net capital account payments (outflows) were virtually unchanged at $0.6 billion in the fourth quarter. (3)

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 $230.1 billion in the fourth quarter, up from $111.1 billion in the third quarter. (4) Net foreign acquisitions of assets in the United States picked up, and net U.S. acquisitions of assets abroad slowed.

U.S.-owned assets abroad

Net U.S.-owned assets abroad increased $116.5 billion in the fourth quarter after an increase of $174.0 billion in the third quarter. The slowdown resulted from a sharp drop in net U.S. purchases of foreign securities and a smaller increase in claims reported by U.S. banks in the fourth quarter than in the third quarter.

U.S. official reserve assets. U.S. official reserve assets increased less than $0.1 billion in the fourth quarter after an increase of $0.1 billion in the third quarter. In the fourth quarter, an increase in U.S. official holdings of foreign currencies was offset by a decrease in the U.S. reserve position in the International Monetary Fund.

U.S. government assets other than official reserve assets. U.S. government assets other than official reserve assets increased $23.6 billion in the fourth quarter after a decrease of $0.6 billion in the third quarter. The increase resulted from reciprocal currency arrangements between the U.S. Federal Reserve System and foreign central banks that do not meet the strict definition of U.S. reserve assets.

Claims reported by banks and by nonbanks. U.S. claims on foreigners reported by U.S. banks and securities brokers increased $43.0 billion in the fourth quarter after an increase of $102.5 billion in the third quarter.

Banks' own claims denominated in dollars increased $92.2 billion after an increase of $75.2 billion. The fourth-quarter increase resulted from substantial lending by U.S. banks to affiliated and unaffiliated banks in Europe, where pressures in the interbank funding market remained somewhat elevated after liquidity had tightened considerably in the third quarter. In Europe, interbank funding remained difficult to obtain, and its cost relative to underlying reference rates remained high, but not as high as in the third quarter. In December, central banks in the United States and Europe implemented measures to provide additional U.S. dollar funds to banks in Europe.

In contrast, lending by securities brokers and dealers to foreigners contracted, largely through a reduction in resale agreements. The contraction partly reflected a cutback in lending to some highly leveraged foreign investors. In addition, some of the funds lent by foreign-owned brokers and dealers to banks in Europe in the third quarter were repaid in the fourth quarter.

Banks' domestic customers' claims denominated in dollars decreased $61.3 billion after an increase of $34.4 billion. The fourth-quarter decrease mostly resulted from large decreases in negotiable certificates of deposit, mainly in the United Kingdom, and in "other" short-term instruments. These decreases were partly offset by a substantial increase in deposits and brokerage balances, mainly in Caribbean financial centers.

Claims reported by U.S. nonbanking concerns decreased $70.8 billion in the fourth quarter after a decrease of $86.8 billion in the third quarter. The decreases in both quarters mostly reflected substantial decreases in financial intermediaries' claims, resulting from foreigners' repayment of funds to U.S. financial intermediaries that were unable to roll over maturing U.S. asset-backed commercial paper.

Foreign securities. Net U.S. purchases of foreign securities were $4.2 billion in the fourth quarter, down sharply from $100.2 billion in the third quarter. The decrease resulted from a shift to net U.S sales of foreign stocks and a decrease in net U.S. purchases of foreign bonds.

Transactions in foreign stocks shifted to net U.S. sales of $9.8 billion from net U.S. purchases of $56.9 billion. The net U.S. sales, the first in more than 5 years, coincided with a broad-based decline in foreign stock prices during most of the quarter (chart 5). Net U.S. sales were largest in November, when a broad index of foreign stock prices declined nearly 5 percent. In the quarter, transactions with Caribbean financial centers shifted back to more typical net U.S. sales from substantial net U.S. purchases. Transactions with Asia shifted to record net U.S. sales, mostly as a result of shifts to net sales to Hong Kong and Japan. After slowing in the third quarter, net U.S. purchases from Europe fell further in the fourth quarter.

Net U.S. purchases of foreign bonds were $14.0 billion, down from $43.3 billion. Turbulent conditions in many world financial markets contributed to a substantial slowdown in global bond issuance and to a significant decline in gross U.S. trading volume in foreign bonds. In November, risk premiums on foreign bonds spiked higher, and U.S. transactions in foreign bonds shifted to sizable net sales. For the quarter, net U.S. purchases from Europe, mostly from the United Kingdom, slowed sharply after six consecutive quarters of strong net purchases. In contrast, transactions with Caribbean financial centers shifted to large net U.S. purchases from net sales. Moderately large net U.S. sales to Latin America continued for the second consecutive quarter.

[GRAPH 5 OMITTED]

Direct investment. Net financial outflows for U.S. direct investment abroad were $116.4 billion in the fourth quarter, up from $58.7 billion in the third quarter. The pickup was largely accounted for by a shift in net equity capital investment abroad from a small decrease to a sizable increase. The fourth-quarter increase was the largest in 3 years, mostly as a result of several large and medium-sized U.S. acquisitions of foreign companies. In addition, net intercompany debt investment abroad decreased less in the fourth quarter than in the third quarter, and reinvested earnings picked up.

Foreign-owned assets in the United States

Net foreign-owned assets in the United States increased $346.6 billion in the fourth quarter after an increase of $276.6 billion in the third quarter. The pickup was mostly attributable to a shift to net foreign purchases of U.S. securities other than U.S. Treasury securities and to a much larger increase in foreign official assets in the United States in the fourth quarter than in the third quarter. In contrast, liabilities reported by U.S. nonbanking concerns decreased in the fourth quarter after increasing in the third quarter, and foreign direct investment in the United States slowed.

Foreign official assets. Foreign official assets in the United States increased $151.2 billion in the fourth quarter after an unusually small increase of $38.9 billion in the third quarter. The fourth-quarter increase was mostly accounted for by an increase in the assets of Asian countries.

Liabilities reported by banks and by nonbanks. U.S. liabilities reported by U.S. banks and securities brokers, excluding U.S. Treasury securities, increased $94.9 billion in the fourth quarter after an increase of $68.4 billion in the third quarter.

Banks' own liabilities denominated in dollars increased $29.2 billion after an increase of $46.6 billion. The fourth-quarter increase resulted from very strong borrowing by U.S.-owned banks from banks abroad. The strong borrowing may have been related to the substantial difficulties faced by some U.S.-owned banks, including large asset write-downs and reported losses, and to continued pressures in the U.S. interbank funding market. U.S. monetary authorities attempted to alleviate these pressures through various means, including the establishment of a temporary Term Auction Facility in December.

In contrast, foreign-owned banks in the United States and securities brokers and dealers shifted funds abroad. Most of the funds shifted by foreign-owned banks went to banks in Europe where pressures in the interbank market remained elevated. For the second consecutive quarter, securities brokers and dealers repaid funds previously borrowed through repurchase agreements.

Banks' customers' liabilities denominated in dollars increased $23.1 billion after an increase of $25.4 billion. The fourth-quarter increase was largely accounted for by an increase in "other" liabilities, mostly to Caribbean financial centers.

[GRAPHIC 6 OMITTED]

U.S. liabilities reported by U.S. nonbanking concerns decreased $93.3 billion after an increase of $56.1 billion. The fourth-quarter decrease partly reflected repayments of funds previously borrowed by U.S. financial intermediaries from affiliated offices in Europe.

U.S. Treasury securities. Net foreign purchases of U.S. Treasury securities were $69.6 billion in the fourth quarter, up from $50.3 billion in the third quarter (chart 6). The fourth-quarter net purchases were the largest in nearly 3 years, and the cumulative net purchases in the last two quarters were the largest ever over a two-quarter period. In the fourth quarter, foreign demand for both short-term and long-term Treasury securities was strong. Yields on short-term securities fell sharply, partly reflecting the easing of U.S. monetary policy and investors' apparent shift in preferences toward low risk and highly liquid assets (chart 7). Yields on long-term securities also decreased substantially.

Other U.S. securities. Transactions in U.S. securities other than U.S. Treasury securities shifted to net foreign purchases of $79.8 billion in the fourth quarter from net foreign sales of $43.1 billion in the third quarter. The large swing resulted from shifts to net foreign purchases of U.S. stocks and of U.S. corporate bonds (chart 6). Net foreign sales of U.S. federally sponsored agency bonds decreased slightly.

[GRAPHIC 7 OMITTED]

Transactions in U.S. stocks shifted to net foreign purchases of $55.6 billion from net foreign sales of $19.9 billion. Net foreign purchases were strong in October when the Standard and Poor's 500 Index reached a record high early in the month. Net purchases weakened considerably in November when stock prices fell substantially and strengthened in December amid continued price volatility. In the fourth quarter, transactions in U.S. stocks by investors from Europe and Caribbean financial centers shifted to net purchases from net sales, and net purchases by investors from Asia, particularly Hong Kong, and Canada strengthened.

Transactions in U.S. corporate bonds shifted to net foreign purchases of $39.1 billion from net foreign sales of $7.0 billion. However, the net purchases were considerably below the level of net purchases recorded in earlier quarters. In the fourth quarter, spreads between yields on corporate bonds and yields on U.S. Treasury bonds increased substantially (chart 8). Net foreign purchases were strongest in December when spreads stabilized at a higher level. Net sales of corporate bonds by investors in Europe eased in the quarter; prior to the third quarter, transactions by these investors were typically substantial net purchases. Transactions by Caribbean financial centers shifted to net purchases from net sales, and net purchases from Asia, mainly Japan, strengthened.

Net foreign sales of U.S. federally sponsored agency bonds were $15.0 billion, down from $16.3 billion. Spreads on agency bonds increased substantially, partly as a result of investors' reluctance to hold the bonds of issuers with connections to the U.S. residential mortgage market. Fourth-quarter net foreign sales also reflected agencies' redemption of a large amount of callable debt that was partly owned by foreigners. Very strong net sales from Asia, mainly China and Hong Kong, were partly offset by substantial net purchases from Europe, mainly the United Kingdom.

Direct investment. Net financial inflows for foreign direct investment in the United States were $39.9 billion in the fourth quarter, down from $101.3 billion in the third quarter. The slowdown resulted from a falloff in net equity capital investment in the United States and, to a lesser extent, a drop in reinvested earnings. The falloff in net equity capital investment mostly resulted from a decrease in the value of foreign acquisitions of U.S. companies after an unusually strong third quarter. Reinvested earnings fell mostly because of a large drop in earnings. In contrast, net intercompany debt investment in the United States picked up.

[GRAPHIC 8 OMITTED]

Revisions to Estimates

The preliminary estimates of U.S. international transactions for the third quarter that were published in the January 2008 SURVEY Or CURRENT BUSINESS have been revised. In addition, the estimates for the first, second, and third quarters have been revised to ensure that the seasonally adjusted estimates sum to the same annual totals as the unadjusted estimates. The revisions to the estimates for the first and second quarters were small.

For the third quarter, the current-account deficit was revised to $177.4 billion from $178.5 billion. The goods deficit was revised to $200.5 billion from $199.7 billion; the services surplus was revised to $28.0 billion from $26.5 billion; the surplus on income was revised to $21.3 billion from $20.5 billion; and net unilateral current transfers to foreigners were revised to $26.2 billion from $25.8 billion. Net financial inflows were revised to $111.1 billion from $93.4 billion.

Data Availability

The estimates that are presented in tables 1-11 of the U.S. international transactions accounts are available interactively on BEA's Web site at <www.bea.gov>. Users may view and download the most recent quarterly estimates for an entire table, or they may select the period, frequency, and lines that they wish to view. The estimates are available in an HTML table, in a spreadsheet file (.xls format), or as comma-separated values.

(1.) Quarterly estimates of U.S. current-account and financial-account components are seasonally adjusted when series demonstrate statistically significant seasonal patterns. When available, seasonally adjusted estimates are cited in this article. The accompanying tables present both adjusted and unadjusted estimates.

(2.) Quantity (real) estimates are calculated using a chain-type Fisher formula with annual weights for all years and quarterly weights for all quarters. Real estimates are expressed as chained (2000) dollars. Price indexes (2000 = 100) are also calculated using a chain-type Fisher formula.

(3.) Capital account transactions largely consist of changes in financial assets of migrants as they enter or leave the United States and U.S. government debt forgiveness.

(4.) In the fourth quarter, net financial inflows exclude transactions in financial derivatives because data are not yet available. In the third quarter, net financial inflows excluding transactions in financial derivatives were $102.5 billion.

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

Line Corresponding
 (Credits +; debits -) 2006 2007 (p)

 Current account

 1 Exports of goods and services and
 income receipts (1) 2,096,165 2,410,587
 2 Goods, balance of payments
 basis (3) 1,023,109 1,149,208
 3 Services (4) 422,594 479,150
 4 Income receipts (12) 650,462 782,229

 5 Imparts of goods and services and
 income payments (18) -2,818,047 -3,044,786
 6 Goods, balance of payments
 basis (20) -1,861,380 -1,964,577
 7 Services (21) -342,845 -372,296
 8 Income payments (29) -613,823 -707,913
 9 Unilateral current transfers,
 net (35) -89,595 -104,438

 Capital account

 10 Capital account transactions,
 net (39) -3,913 -2,317

 Financial account

 11 U.S. owned assets abroad,
 excluding financial
 derivatives (increase/
 financial outflow (-))(40) -1,055,176 -1,206,332
 12 U.S. official reserve assets (41) 2,374 -122
 13 U.S. government assets, other
 than official reserve
 assets (46) 5,346 -22,931
 14 U.S. private assets (50) -1,062,896 -1,183,278

 15 Foreign-owned assets in the United
 States, excluding financial
 derivatives (increase/
 financial inflow (+)) (55) 1,859,597 1,863,697
 16 Foreign official assets in the
 United States (56) 440,264 412,698
 17 Other foreign assets in the
 United States (63) 1,419,333 1,450,999

 18 Financial derivatives, net (70) 28,762 n.a.

 19 Statistical discrepancy (sum of
 above items with sign
 reversed) (71) -17,794 83,590

 Memoranda:
 20 Balance on current account (77) 811,477 -738,638
 21 Net financial flows
 (40, 55, and 70) 833,183 657,365

 2006
Line Corresponding Change:
 (Credits +; debits -) 2006-2007 I

 Current account

 1 Exports of goods and services and
 income receipts (1) 314,422 494,027
 2 Goods, balance of payments
 basis (3) 126,099 243,880
 3 Services (4) 56,556 101,756
 4 Income receipts (12) 131,767 148,391

 5 Imparts of goods and services and
 income payments (18) -226,739 -673,277
 6 Goods, balance of payments
 basis (20) -103,197 -451,637
 7 Services (21) -29,451 -83,711
 8 Income payments (29) -94.09 -137,929
 9 Unilateral current transfers,
 net (35) -14,843 -21,360

 Capital account

 10 Capital account transactions,
 net (39) 1,596 -1,724

 Financial account

 11 U.S. owned assets abroad,
 excluding financial
 derivatives (increase/
 financial outflow (-))(40) -151,156 -344,032
 12 U.S. official reserve assets (41) -2,496 513
 13 U.S. government assets, other
 than official reserve
 assets (46) -28,277 1,049
 14 U.S. private assets (50) -120,382 -345,594

 15 Foreign-owned assets in the United
 States, excluding financial
 derivatives (increase/
 financial inflow (+)) (55) 41,001 538,140
 16 Foreign official assets in the
 United States (56) -27,566 125,257
 17 Other foreign assets in the
 United States (63) 31,666 412,883

 18 Financial derivatives, net (70) -28,762 1,633

 19 Statistical discrepancy (sum of
 above items with sign
 reversed) (71) 101,384 6,593

 Memoranda:
 20 Balance on current account (77) 72,839 -200,611
 21 Net financial flows
 (40, 55, and 70) -175,818 195,741

 2006
Line Corresponding
 (Credits +; debits -) II III

 Current account

 1 Exports of goods and services and
 income receipts (1) 518,595 532,894
 2 Goods, balance of payments
 basis (3) 252,458 260,285
 3 Services (4) 104,117 105,583
 4 Income receipts (12) 162,020 167,026

 5 Imparts of goods and services and
 income payments (18) -700,504 -726,352
 6 Goods, balance of payments
 basis (20) -463,734 -479,184
 7 Services (21) -85,419 -85,991
 8 Income payments (29) -151,352 -161,177
 9 Unilateral current transfers,
 net (35) -23,686 -23,877

 Capital account

 10 Capital account transactions,
 net (39) -1,008 -545

 Financial account

 11 U.S. owned assets abroad,
 excluding financial
 derivatives (increase/
 financial outflow (-))(40) -212,218 -209,898
 12 U.S. official reserve assets (41) -560 1,006
 13 U.S. government assets, other
 than official reserve
 assets (46) 1,765 1,570
 14 U.S. private assets (50) -213,423 -212,474

 15 Foreign-owned assets in the United
 States, excluding financial
 derivatives (increase/
 financial inflow (+)) (55) 355,442 449,987
 16 Foreign official assets in the
 United States (56) 120,861 108,799
 17 Other foreign assets in the
 United States (63) 234,581 341,188

 18 Financial derivatives, net (70) 14,001 14,911

 19 Statistical discrepancy (sum of
 above items with sign
 reversed) (71) 49,378 -37,121

 Memoranda:
 20 Balance on current account (77) -205,595 -217,334
 21 Net financial flows
 (40, 55, and 70) 157,225 255,000

 2006 2007
Line Corresponding
 (Credits +; debits -) IV I (r)

 Current account

 1 Exports of goods and services and
 income receipts (1) 550,649 557,146
 2 Goods, balance of payments
 basis (3) 266,486 269,289
 3 Services (4) 111,137 111,706
 4 Income receipts (12) 173,025 176,151

 5 Imparts of goods and services and
 income payments (18) -717,914 -728,338
 6 Goods, balance of payments
 basis (20) -466,825 -471,001
 7 Services (21) -87,724 -88,614
 8 Income payments (29) -163,365 -168,723
 9 Unilateral current transfers,
 net (35) -20,673 -27,009

 Capital account

 10 Capital account transactions,
 net (39) -637 -559

 Financial account

 11 U.S. owned assets abroad,
 excluding financial
 derivatives (increase/
 financial outflow (-))(40) -289,028 -449,933
 12 U.S. official reserve assets (41) 1,415 -72
 13 U.S. government assets, other
 than official reserve
 assets (46) 962 445
 14 U.S. private assets (50) -291,405 450,306

 15 Foreign-owned assets in the United
 States, excluding financial
 derivatives (increase/
 financial inflow (+)) (55) 516,029 617,724
 16 Foreign official assets in the
 United States (56) 85,347 152,193
 17 Other foreign assets in the
 United States (63) 430,682 465,531

 18 Financial derivatives, net (70) -1,783 14,800

 19 Statistical discrepancy (sum of
 above items with sign
 reversed) (71) -36,643 16,170

 Memoranda:
 20 Balance on current account (77) -187,938 -198,201
 21 Net financial flows
 (40, 55, and 70) 225,218 182,591

 2007
Line Corresponding
 (Credits +; debits -) II (r) III (r)

 Current account

 1 Exports of goods and services and
 income receipts (1) 590,756 626,130
 2 Goods, balance of payments
 basis (3) 278,511 297,118
 3 Services (4) 116,851 122,583
 4 Income receipts (12) 195,394 206,428

 5 Imparts of goods and services and
 income payments (18) -757,645 -777,362
 6 Goods, balance of payments
 basis (20) -483,570 -497,665
 7 Services (21) -91,264 -94,606
 8 Income payments (29) -182,811 -185,091
 9 Unilateral current transfers,
 net (35) -23,169 -26,211

 Capital account

 10 Capital account transactions,
 net (39) -598 -609

 Financial account

 11 U.S. owned assets abroad,
 excluding financial
 derivatives (increase/
 financial outflow (-))(40) -465,910 -174,027
 12 U.S. official reserve assets (41) 26 -54
 13 U.S. government assets, other
 than official reserve
 assets (46) -369 623
 14 U.S. private assets (50) -465,565 -174,596

 15 Foreign-owned assets in the United
 States, excluding financial
 derivatives (increase/
 financial inflow (+)) (55) 622,851 276,555
 16 Foreign official assets in the
 United States (56) 70,464 38,857
 17 Other foreign assets in the
 United States (63) 552,387 237,698

 18 Financial derivatives, net (70) -1,007 8,552

 19 Statistical discrepancy (sum of
 above items with sign
 reversed) (71) 34,719 66,972

 Memoranda:
 20 Balance on current account (77) -190,058 -177,444
 21 Net financial flows 155,937 111,080
 (40, 55, and 70)

 2007
Line Corresponding Change:
 (Credits +; debits -) IV (p) 2007:III-IV

 Current account

 1 Exports of goods and services and
 income receipts (1) 636,554 10,424
 2 Goods, balance of payments
 basis (3) 304,290 7,172
 3 Services (4) 128,009 5,426
 4 Income receipts (12) 204,256 -2,172

 5 Imparts of goods and services and
 income payments (18) -781,438 -4,076
 6 Goods, balance of payments
 basis (20) -512.341 -14,676
 7 Services (21) -97,811 -3,205
 8 Income payments (29) -171,287 13,804
 9 Unilateral current transfers,
 net (35) -28,052 -1,841

 Capital account

 10 Capital account transactions,
 net (39) -552 57

 Financial account

 11 U.S. owned assets abroad,
 excluding financial
 derivatives (increase/
 financial outflow (-))(40) -116,464 57,563
 12 U.S. official reserve assets (41) -22 32
 13 U.S. government assets, other
 than official reserve
 assets (46) -23,630 -24,253
 14 U.S. private assets (50) -92,812 81,784

 15 Foreign-owned assets in the United
 States, excluding financial
 derivatives (increase/
 financial inflow (+)) (55) 346,567 70,012
 16 Foreign official assets in the
 United States (56) 151,184 112,327
 17 Other foreign assets in the
 United States (63) 195,383 -42,315

 18 Financial derivatives, net (70) n.a. -8,552

 19 Statistical discrepancy (sum of
 above items with sign
 reversed) (71) -56,615 -123,587

 Memoranda:
 20 Balance on current account (77) -172,936 4,508
 21 Net financial flows
 (40, 55, and 70) 230,103 119,023

(p) Preliminary

(r) Revised

n.a. Not available

Table B. U.S. Trade in Goods in Current and Chained (2000)
Dollars and Percent Changes From Previous Period
[Balance of payments basis, millions of dollars,
quarters seasonally adjusted]

 Current dollars

 2006 2007 (p)

Exports 1,023,109 1,149,208
 Agricultural products 72,869 92,079
 Nonagricultural products 950,240 1,057,129

Imports 1,861,380 1,964,577
 Petroleum and products 302,430 331,019
 Nonpetroleum products 1,558,950 1,633,558

 Current dollars

 2007

 II III IV

Exports 252,458 260,285 266,486
 Agricultural products 18,028 18,689 18,843
 Nonagricultural products 234,430 247,643 247,643

Imports 463,734 479,184 466,825
 Petroleum and products 78,713 82,768 67,587
 Nonpetroleum products 385,021 396,416 399,238

 Current dollars

 2007

 I (r) II (r) III (r) IV (r)

Exports 269,289 278,511 297,118 304,290
 Agricultural products 19,511 21,466 25,446 25,656
 Nonagricultural products 249,778 254,045 271,672 278,634

Imports 471,001 483,570 497,665 512,341
 Petroleum and products 70,940 78,228 81,968 99,883
 Nonpetroleum products 400,061 405,342 415,697 412,458

 Chained (2000) dollars (1)

 2006 2007 (p)

Exports 920,741 997,828
 Agricultural products 58,085 61,762
 Nonagricultural products 864,444 938,161

Imports 1,630,244 11,660,983
 Petroleum and products 138,180 135,161
 Nonpetroleum products 1,504,894 1,544,809

 Chained (2000) dollars (1)

 2006

 II III IV

Exports 227,805 231,902 237,389
 Agricultural products 14,732 14,802 14,320
 Nonagricultural products 213,471 217,529 223,642

Imports 403,626 1,411,681 411,877
 Petroleum and products 33,892 34,169 33,566
 Nonpetroleum products 373,187 381,477 383,058

 Chained (2000) dollars (1)

 2007

 I (r) II (r) III (r) IV (r)

Exports 237,846 242,978 257,172 259,398
 Agricultural products 13,946 15,069 16,889 15,709
 Nonagricultural products 224,566 228,377 240,507 244,450

Imports 414,796 413,082 417,308 415,716
 Petroleum and products 35,859 33,666 32,010 34,048
 Nonpetroleum products 381,861 384,360 392,849 385,695

 Percent change from previous period
 (current dollars)

 2006 2007 (p)

Exports 14.4 12.3
 Agricultural products 12.3 26.4
 Nonagricultural products 14.5 11.2

Imports 10.7 5.5
 Petroleum and products 20.1 9.5
 Nonpetroleum products 9.0 4.8

 Percent change from previous period
 (current dollars)

 2006

 II III IV

Exports 3.5 3.1 2.4
 Agricultural products 4.2 3.7 0.8
 Nonagricultural products 3.5 3.1 2.5

Imports 2.7 3.3 -2.6
 Petroleum and products 7.3 5.2 -18.3
 Nonpetroleum products 1.8 3.0 0.7

 Percent change from previous period
 (current dollars)

 2007

 I (r) II (r) III (r) IV (r)

Exports 1.1 3.4 6.7 2.4
 Agricultural products 3.5 10.0 18.5 0.8
 Nonagricultural products 0.9 2.9 5.7 2.6

Imports 0.9 2.7 2.9 3.0
 Petroleum and products 5.0 10.3 4.8 21.9
 Nonpetroleum products 0.2 1.3 2.6 -0.8

 Percent change from
 previous period
 (current dollars)

 2006 2007 (p)

Exports 10.7 8.4
 Agricultural products 8.5 6.3
 Nonagricultural products 10.8 8.5

Imports 6.2 1.9
 Petroleum and products -2.0 -2.2
 Nonpetroleum products 7.7 2.7

 Percent change from previous period
 (current dollars)

 2006

 II III IV

Exports 2.0 1.8 2.4
 Agricultural products 3.5 0.5 -3.3
 Nonagricultural products 1.8 1.9 2.8

Imports 0.2 2.0 0.0
 Petroleum and products -7.3 0.8 -1.8
 Nonpetroleum products 1.7 2.2 0.4

 Percent change from previous period
 (current dollars)

 2007

 I (r) II (r) III (r) IV (r)

Exports 0.2 2.2 5.8 0.9
 Agricultural products -2.6 8.1 12.1 -7.0
 Nonagricultural products 0.4 1.7 5.3 1.6

Imports 0.7 -0.4 1.0 -0.4
 Petroleum and products 6.8 -6.1 -4.9 6.4
 Nonpetroleum products -0.3 0.7 2.2 -1.8

(p) Preliminary

(1.) Because chain indexes use weights of more than one period,
the corresponding chained dollar estimates are usually not additive.

NOTE. Percent changes in quarterly estimates are not
annualized and are expressed at quarterly rates.

Table C. Indexes of Foreign Currency Price of the U.S. Dollar
[January 1999=100]

 2006 2007

 IV I II III IV
Nominal: (1)
 Broad (2) 93.9 93.7 91.5 89.8 86.7
 Major currencies (3) 86.3 86.7 83.9 81.4 77.6
 Other important
 trading
 partners (4) 103.7 102.9 101.2 100.6 98.7
Real: (1)
 Broad (2) 96.0 95.9 95.0 92.7 89.0
 Major
 currencies (3) 93.8 94.5 92.8 90.1 85.6
 Other important
 trading
 partners (4) 98.5 97.5 97.5 95.8 92.7
Selected currencies:
(nominal) (5)
 Canada 75.0 77.1 72.3 68.8 64.6
 European currencies:
 Euro area (6) 89.9 88.4 86.0 84.3 80.0
 United Kingdom 86.1 84.4 83.1 81.6 80.7
 Switzerland 89.1 89.0 88.2 86.5 82.7
 Japan 104.0 105.4 106.6 103.9 99.9
 Mexico 107.5 108.8 107.4 108.2 107.1
 Brazil 142.2 139.3 131.1 126.7 118.0

 2006 2007

 Dec. Jan. Feb. March April
Nominal: (1)
 Broad (2) 93.2 94.1 93.8 93.3 92.1
 Major currencies (3) 85.6 87.2 86.9 86.0 84.5
 Other important
 trading
 partners (4) 103.0 103.1 102.8 102.8 101.9
Real: (1)
 Broad (2) 95.0 96.1 95.7 96.0 95.3
 Major
 currencies (3) 92.8 94.7 94.6 94.3 93.1
 Other important
 trading
 partners (4) 97.4 97.7 96.9 97.9 97.8
Selected currencies:
(nominal) (5)
 Canada 75.9 77.4 77.1 76.9 74.7
 European currencies:
 Euro area (6) 87.8 89.2 88.6 87.5 85.8
 United Kingdom 84.0 84.2 84.2 84.7 83.0
 Switzerland 87.3 89.7 89.4 87.9 87.5
 Japan 103.6 106.3 106.4 103.5 105.0
 Mexico 107.2 108.2 108.6 109.7 108.4
 Brazil 142.0 141.4 138.5 138.1 134.3

 2007

 May June July Aug. Sept.
Nominal: (1)
 Broad (2) 91.3 91.0 89.9 90.4 89.1
 Major currencies (3) 83.8 83.5 82.0 82.0 80.3
 Other important
 trading
 partners (4) 101.0 100.8 100.1 101.2 100.6
Real: (1)
 Broad (2) 91.0 94.7 93.1 93.2 91.9
 Major
 currencies (3) 92.8 92.5 90.8 90.6 88.8
 Other important
 trading
 partners (4) 97.5 97.2 95.8 96.2 95.4
Selected currencies:
(nominal) (5)
 Canada 72.1 70.1 69.1 69.6 67.6
 European currencies:
 Euro area (6) 85.7 86.4 84.4 85.1 83.3
 United Kingdom 83.1 83.0 81.1 82.0 81.7
 Switzerland 88.1 89.0 87.1 86.8 85.5
 Japan 106.6 108.3 107.2 103.0 101.5
 Mexico 106.9 107.0 106.8 109.0 108.9
 Brazil 131.2 127.8 124.4 129.8 125.8

 2007

 Oct. Nov. Dec.
Nominal: (1)
 Broad (2) 87.3 86.0 86.8
 Major currencies (3) 78.3 76.4 78.0
 Other important
 trading
 partners (4) 99.1 98.7 98.3
Real: (1)
 Broad (2) 89.7 88.3 88.9
 Major
 currencies (3) 86.4 84.5 86.0
 Other important
 trading
 partners (4) 93.3 92.6 92.1
Selected currencies:
(nominal) (5)
 Canada 64.2 63.7 66.0
 European currencies:
 Euro area (6) 81.4 78.9 79.6
 United Kingdom 80.7 79.7 81.8
 Switzerland 84.7 81.1 82.3
 Japan 102.3 98.0 99.3
 Mexico 106.8 107.4 107.1
 Brazil 119.0 116.9 118.1

(1.) For more information on the nominal and real indexes of the
foreign exchange value of the U.S. dollar, see Federal Reserve
Bulletin 84 (October 1991811-18.

(2.) Weighted average of the foreign exchange value of the U.S.
dollar against the currencies of a broad group of U.S. trading
partners, including the currencies of the euro area countries,
Australia, Canada, Japan, Sweden, Switzerland, United Kingdom,
Argentina, Brazil, Chile, Colombia, Mexico, Venezuela, China, Hong
Kong, India, Indonesia, Korea, Malaysia, the Philippines,
Singapore. Taiwan, Thailand, Israel, Saudi Arabia, and Russia.
Data: Federal Reserve Board. Monthly and quarterly average rates.
Index rebased by BEA.

(3.) Weighted average of the foreign exchange value of the U.S.
dollar against broad-index currencies that circulate widely outside
the country of issue, including the currencies of the euro area
countries, Australia, Canada, Japan, Sweden, Switzerland, and the
United Kingdom. The weight for each currency is its broad-index
weight divided by the sum of the broad-index weights for all of the
currencies included in the major currency index. Data: Federal
Reserve Board. Monthly and quarterly average rates. Index rebased
by BEA.

(4.) Weighted average of the foreign exchange value of the U.S.
dollar against broad-index currencies that do not circulate widely
outside the country of issue, including the currencies of
Argentina, Brazil, Chile, Colombia, Mexico, Venezuela, China, Hong
Kong, India, Indonesia, Korea, Malaysia, the Philippines,
Singapore, Taiwan, Thailand, Israel, Saudi Arabia, and Russia. The
weight for each currency is its broad-index weight divided by the
sum of the broad-index weights for all of the currencies included
in the other important trading partners index. Data: Federal
Reserve Board. Monthly and quarterly average rates. Index rebased
by BEA.

(5.) Data: Federal Reserve Board. Monthly and quarterly average
rates. Indexes prepared by BEA.

(6.) The euro area includes Austria, Belgium, Finland, France,
Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal,
and Spain: beginning with the first quarter of 2007, also includes
Slovenia.