U.S. International transactions: second quarter of 2007.

Whitaker, Erin M. ; 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 $190.8 billion (preliminary) in the second quarter of 2007 from $197.1 billion (revised) in the first quarter (table A, chart 1). The decrease resulted from a decrease in net unilateral current transfers to foreigners and increases in the surpluses on services and on income. In contrast, the deficit on goods 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 $150.9 billion in the second quarter, down from $181.9 billion in the first quarter. Net U.S. acquisitions of assets abroad picked up more than net foreign acquisitions of assets in the United States.

The statistical discrepancy--errors and omissions in recorded transactions--was a positive $40.4 billion in the second quarter, compared with a positive $15.7 billion in the first quarter.

The following are highlights for the second quarter of 2007:

* Goods exports increased at the strongest rate in a year. Goods imports also picked up as a result of strong increases in petroleum and products and in other industrial supplies and materials.

* Net U.S. purchases of foreign securities remained strong.

* Net private foreign transactions in U.S. Treasury securities shifted to net sales from net purchases, and net private foreign purchases of other U.S. securities surged.

* Both U.S. claims and U.S. liabilities reported by U.S. banks increased less strongly in the second quarter than in the first quarter.

Selected economic and financial market developments

In the second quarter, the U.S. dollar depreciated 3 percent on a nominal, trade-weighted, quarterly average basis against a group of seven major currencies that are widely traded in international markets (table B, chart 2). The U.S. dollar depreciated 6 percent against the Canadian dollar and 3 percent against the euro, and it appreciated 1 percent against the Japanese yen.

In the United States, data releases in the second quarter indicated that U.S. economic growth in the first quarter slowed. Releases indicated that the U.S. deficit on trade in goods and services on a 3-month moving-average basis widened somewhat. U.S. monetary authorities left the target level for the Federal funds rate at 5.25 percent, and other U.S. short-term interest rates changed little (chart 3). U.S. and foreign long-term interest rates increased strongly, partly as a result of rising concerns about inflation. U.S. and foreign stock prices also increased strongly. In the last weeks of June, credit spreads began to increase as deteriorating conditions in the market for subprime mortgages led to downgrades of some securities backed by those mortgages.

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In Europe, data releases indicated that euro area economic growth in the first quarter weakened somewhat. Among selected countries, growth in Germany and Italy slowed, and growth in France and Spain was nearly the same as in the fourth quarter. Euro area monetary authorities raised the minimum bid rate on main refinancing operations, a key policy-controlled interest rate, to 4.00 percent from 3.75 percent. Euro area short-term interest rates have increased roughly 200 basis points in the last year and a half, reducing the large gap that had existed between U.S. and euro area short-term rates. In the second quarter, the Bank of England also increased its key monetary policy interest rate to 5.50 percent from 5.25 percent.

In Japan, reports showed that economic growth in the first quarter weakened after very strong growth in the fourth quarter. Japanese monetary authorities left the key overnight lending rate at 0.50 percent.

In Canada, reported economic growth in the first quarter accelerated, as the Canadian economy continued to benefit from buoyant global markets for its abundant natural resources, such as oil and metals. The Canadian dollar surged to a near-30-year high against the U.S. dollar. Canadian monetary authorities left the target level for the overnight rate at 4.25 percent.

Current Account

Goods and services

The deficit on goods and services increased slightly to $177.7 billion in the second quarter from $177.6 billion in the first quarter. A $3.3 billion increase in the deficit on goods was nearly offset by a $3.2 billion increase in the surplus on services.

Goods

The deficit on goods increased to $204.2 billion in the second quarter from $200.9 billion in the first quarter, as imports increased more than exports. Despite the increase, the goods deficit was smaller in each of the last three quarters than in each of the preceding four quarters.

On a price-adjusted, or real, basis, exports have grown at a considerably stronger rate than imports over the last 2 1/2 years. Real export growth, which has been generally strong since mid-2003, has been supported by strengthening economic growth in many foreign countries and by the substantial depreciation of the U.S. dollar against many foreign currencies since early 2002. Real import growth has generally weakened from its pre-2005 pace.

The stronger growth in exports than in imports has made a positive contribution to real GDP growth in most recent quarters.

Exports. In the second quarter, current-dollar exports of goods increased $9.2 billion, or 3.4 percent, to $279.3 billion (chart 4). The percentage increase was the strongest in a year. Real exports increased 2.1 percent, and export prices increased 1.3 percent (chart 5). (2)

After slowing in recent quarters, nonagricultural industrial supplies and materials increased $5.0 billion in the second quarter. The increase was largely accounted for by increases in nonferrous metals, mostly nonmonetary gold to Switzerland, and in energy products. Energy products were boosted by exports of petroleum and products, mostly fuel oil to Latin America, and of natural gas to Canada. Increases in chemicals and in iron and steel products also contributed to the increase in nonagricultural industrial supplies and materials.

Agricultural products increased $2.0 billion in the second quarter after increasing substantially in recent quarters. The second-quarter increase was mostly accounted for by large increases in soybeans and raw cotton. Soybeans surged, mostly to Mexico and Japan. Raw cotton was boosted by shipments to China and other Asian countries. These increases were partly offset by the first decrease in corn in nine quarters.

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Automotive vehicles, parts, and engines increased $1.6 billion as a result of a step-up in exports to areas except Canada. Passenger cars, mainly to Europe, increased strongly for the third time in four quarters. Engines, parts, and accessories to Mexico and Asian countries increased strongly, but these increases were largely offset by decreases in these products to Canada.

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Capital goods increased $0.8 billion. The largest increases were in "other" industrial machinery (mostly for manufacturing semiconductors), in measuring, testing, and control instruments, and in scientific, hospital, and medical equipment. These increases were largely offset by decreases in computers, peripherals, and parts, in oil drilling, mining, and construction machinery, in civilian aircraft, and in semiconductors.

Consumer goods increased $0.7 billion, reflecting continued growth in durable goods. In the second quarter, the largest increase was in toys, shooting, and sporting goods, mainly to Canada.

Imports. Imports of goods increased $12.6 billion, or 2.7 percent, to $483.6 billion. Real imports decreased 0.4 percent, and import prices increased 3.1 percent (chart 5). The increase in value resulted from increases in petroleum and products and in nonpetroleum industrial supplies and materials.

Petroleum and products increased $7.3 billion, as a result of a rise in petroleum prices (chart 6). After falling for two consecutive quarters, the average price per barrel jumped 17 percent, to $63.84, in the second quarter. In contrast, the average number of barrels imported daily decreased, to 13.41 million from 14.28 million. Petroleum imports from Europe increased $4.2 billion, largely from the United Kingdom and Russia, and imports from members of OPEC increased $2.0 billion, mostly from Saudi Arabia and Venezuela. U.S. domestic petroleum production increased, and domestic petroleum consumption decreased slightly.

Nonpetroleum industrial supplies and materials increased $6.5 billion. More than 40 percent of the rise was accounted for by natural gas, mostly from Canada. Nonferrous metals also increased strongly, mostly nonmonetary gold and "other" nonferrous metals, such as nickel and copper. In addition, chemicals, iron and steel products, and steelmaking materials all rebounded after falling in the first quarter.

Capital goods increased $0.1 billion, a marked slowdown from growth in the first quarter. Computers, peripherals, and parts fell substantially after rising substantially in the first quarter, and telecommunications equipment and semiconductors also decreased. These decreases were offset by increases in most other commodity categories, including electric generating machinery, "other" industrial, agricultural, and service industry machinery, and civilian aircraft, engines, and parts.

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Foods, feeds, and beverages increased $0.1 billion. Increases in vegetables, fruits, nuts, and preparations, mostly from Canada, and in green coffee were mostly offset by decreases in other commodities.

Consumer goods decreased $1.0 billion after sizable increases in the last six consecutive quarters. The decrease resulted from declines in both nondurable and durable goods Nondurable goods fell largely as a result of a drop in medical, dental, and pharmaceutical products from Ireland. Among durable goods, a large decrease in television and video receivers, mainly from Mexico, was partly offset by an increase in toys, shooting, and sporting goods, mainly from China.

Automotive vehicles, parts, and engines decreased $0.3 billion. The decrease resulted from a second consecutive large quarterly decline in passenger cars, partly reflecting weak U.S. domestic sales of motor vehicles. In contrast, imports of parts and accessories and of engines increased.

Balances by area. The goods deficit increased $3.3 billion to $204.2 billion. Despite the increase, the goods deficit was smaller in each of the last three quarters than in each of the preceding four quarters, partly as a result of smaller deficits with Europe.

In the second quarter, the deficit increased as a result of increases in the deficits with Europe (mostly the Netherlands, the United Kingdom, and Russia), the Middle East (mostly Saudi Arabia), and Africa. In contrast, the large goods deficit with Asia and Pacific decreased, as decreases in the deficits with Japan, Taiwan, Korea, and Malaysia more than offset an increase in the deficit with China. The goods deficits with Canada and with Latin America and Other Western Hemisphere also decreased.

Services

The surplus on services increased to $26.5 billion in the second quarter from $23.3 billion in the first quarter, as services receipts increased much more than services payments. The surplus on services has increased strongly in recent quarters.

Travel receipts increased $1.3 billion to $23.6 billion. The rise was mostly accounted for by an increase in receipts from overseas visitors to the United States. The number of overseas visitors has increased substantially in the last three quarters, partly as a result of the rise in the value of many foreign currencies against the U.S. dollar. Travel payments increased $0.1 billion to $18.7 billion. The number of U.S. travelers overseas has increased only slightly over the last four quarters, as the weakness of the U.S. dollar has increased the cost of travel abroad.

Passenger fare receipts increased $0.4 billion to $6.1 billion, and passenger fare payments decreased $0.1 billion to $6.7 billion.

"Other" transportation receipts increased $0.6 billion to $12.8 billion. The increase resulted from a substantial rise in receipts for freight services, mostly for air freight, and an increase in receipts for port services. "Other" transportation payments increased $0.1 billion to $16.6 billion.

"Other" private services receipts increased $1.8 billion to $52.5 billion. The largest increases were in receipts for financial services and for business, professional, and technical services. "Other" private services payments increased $0.7 billion to $31.9 billion. The largest increases were in payments for business, professional, and technical services, for financial services, and for insurance services.

Income

The surplus on income increased to $9.4 billion in the second quarter from $7.5 billion in the first quarter.

Receipts of income on U.S. direct investment abroad increased $6.3 billion to $85.8 billion. The increase mostly resulted from higher earnings of foreign affiliates in holding companies and in "other" industries, particularly mining. The increase in mining reflected higher earnings of affiliates engaged in the extraction of oil, natural gas, and metal ores. By area, earnings of affiliates in Europe accounted for the majority of the total increase.

Payments of income on foreign direct investment in the United States increased $4.5 billion to $36.2 billion after decreasing for two consecutive quarters. The increase largely resulted from a rise in the earnings of U.S. wholesale trade affiliates, particularly in petroleum wholesale trade. Earnings of U.S. affiliates in all other major industries also increased. The increase in manufacturing was partly due to a rise in earnings of petroleum manufacturing affiliates.

Both receipts and payments of "other" private income and U.S. Government income increased, largely as a result of higher average holdings. Receipts of "other" private income increased $8.4 billion to $103.8 billion. The increase was mostly accounted for by increases in interest receipts on bank claims and in dividend and interest receipts on U.S. holdings of foreign securities. Government income receipts increased $0.1 billion to $0.6 billion.

Payments of "other" private income increased $6.6 billion to $103.6 billion. The increase was mostly accounted for by increases in interest payments on bank liabilities and in interest and dividend payments on foreign holdings of U.S. securities. Payments of income on U.S. Government liabilities increased $1.8 billion to $39.4 billion.

Unilateral current transfers

Net unilateral current transfers to foreigners were $22.5 billion in the second quarter, down from $27.0 billion in the first quarter. The decrease resulted from a drop in U.S. Government grants, which were boosted in the first quarter by disbursements of grants to Israel and Egypt.

Capital Account

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

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 $150.9 billion in the second quarter, down from $181.9 billion in the first quarter? Net acquisitions by U.S. residents picked up more than net acquisitions by foreign residents.

U.S.-owned assets abroad

Net U.S.-owned assets abroad increased $469.5 billion in the second quarter after an increase of $449.5 billion in the first quarter. The pickup was attributable to a larger increase in claims reported by U.S. nonbanking concerns in the second quarter than in the first quarter. In contrast, U.S. claims on foreigners reported by U.S. banks increased less in the second quarter than in the first quarter, and direct investment slowed.

U.S. official reserve assets. U.S. official reserve assets decreased less than $0.1 billion in the second quarter after an increase of $0.1 billion in the first quarter. The small decrease mostly resulted from a decrease in the U.S. reserve position in the International Monetary Fund (IMF), reflecting the repayment of U.S. dollars to the IMF by foreign countries.

Claims reported by banks and by nonbanks. U.S. claims on foreigners reported by U.S. banks and securities brokers increased $203.9 billion in the second quarter after an increase of $233.4 billion in the first quarter (chart 7).

Banks' own claims denominated in dollars increased $102.8 billion after an increase of $219.6 billion. The slowdown mostly reflected a sharp slowdown in lending by foreign-owned banks in the United States to banks abroad. Lending by U.S. brokers and dealers slowed somewhat but remained substantial; second-quarter lending was mostly in the form of resale agreements to banks and nonbanks in Europe, where credit demand had been strengthened by elevated merger and acquisition activity and robust economic growth. In addition, U.S.-owned banks lent funds to foreign nonbanks in Europe. Banks' own claims decreased substantially in June, but they rebounded by a similar amount in July.

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Banks' domestic customers' claims denominated in dollars increased $83.0 billion after an increase of $1.7 billion. The second-quarter increase mostly resulted from a very large increase in customers' holdings of foreign short-term debt, particularly negotiable certificates of deposit and "other" short-term instruments.

Claims reported by U.S. nonbanking concerns increased $105.6 billion in the second quarter after an increase of $47.8 billion in the first quarter. The second-quarter increase was largely attributable to increased deposits in Caribbean financial centers.

Foreign securities. Net U.S. purchases of foreign securities were $88.1 billion in the second quarter, up slightly from $87.2 billion in the first quarter. An increase in net U.S. purchases of foreign bonds was largely offset by a decrease in net U.S. purchases of foreign stocks.

Net U.S. purchases of foreign stocks were $40.3 billion, down from $43.5 billion (chart 8). Net U.S. purchases have been substantial in the last three quarters, partly in response to the consistently stronger performance of foreign stock markets than of the U.S. stock market, particularly in U.S. dollar terms. In the second quarter, net U.S. purchases of stocks from Europe decreased but remained strong, and net U.S. sales to Caribbean financial centers increased. In contrast, net U.S. purchases from Latin America and Asia increased.

Net U.S. purchases of foreign bonds were $47.8 billion, up from $43.7 billion (chart 8). Net U.S. purchases were strong for the fifth consecutive quarter. In the second quarter, foreign bond prices turned down amid concerns about rising inflation. The increase in net U.S. purchases of foreign bonds largely reflected a shift to net U.S. purchases of bonds from Latin America. In contrast, net U.S. sales to Asia increased, and net U.S. purchases from Europe decreased slightly but remained very strong. Early in the third quarter, transactions in foreign bonds shifted substantially to net U.S. sales, as credit spreads on riskier assets increased sharply.

Direct investment. Net financial flows for U.S. direct investment abroad were $71.5 billion in the second quarter, down from $81.4 billion in the first quarter. The slowdown was largely accounted for by a shift from an increase to a decrease in net U.S. intercompany debt investment abroad that resulted from shifts to decreases in debt investment in finance and holding company affiliates. In addition, net equity capital investment abroad slowed, mostly as a result of a rise in U.S. parents' sales of existing affiliates. Acquisitions of new affiliates were substantial as a result of acquisitions of holding company and finance affiliates. Reinvested earnings increased, mostly as a result of higher earnings by affiliates in Europe.

Foreign-owned assets in the United States

Net foreign-owned assets in the United States increased $620.4 billion in the second quarter after an increase of $616.6 billion in the first quarter. The slight pickup was the result of large, mostly offsetting changes in several categories of foreign-owned assets.

Foreign official assets. Foreign official assets in the United States increased $70.1 billion in the second quarter after an increase of $152.2 billion in the first quarter. The considerable slowdown reflected a slowdown in the accumulation of assets by Asian countries and a decrease in assets of European countries after a first-quarter increase.

Liabilities reported by banks and by nonbanks. U.S. liabilities reported by U.S. banks and securities brokers, excluding U.S. Treasury securities, increased $137.8 billion in the second quarter after an increase of $203.6 billion in the first quarter.

Banks' own liabilities denominated in dollars increased $109.3 billion after an increase of $166.0 billion. The slowdown reflected a sharp slowdown in borrowing by U.S. brokers and dealers through repurchase agreements. In contrast, borrowing by U.S. banks picked up substantially, mostly in the form of deposits from banks in Caribbean financial centers. Banks' own liabilities decreased strongly in June, but they rebounded by a similar amount in July.

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Banks' customers' liabilities denominated in dollars decreased $1.8 billion after an increase of $30.8 billion. The decrease was more than accounted for by a decrease in "other" liabilities, mostly as a result of loan repayments.

U.S. liabilities reported by U.S. nonbanking concerns increased $108.1 billion after an increase of $93.6 billion. The second-quarter increase mostly reflected an increase in borrowing from the United Kingdom and Caribbean financial centers.

U.S. Treasury securities. Transactions in U.S. Treasury securities shifted to net foreign sales of $7.6 billion in the second quarter from net foreign purchases of $44.6 billion in the first quarter (chart 9). Prices of long-term U.S. Treasury securities decreased through most of the quarter, and yields on 10-year securities rose to the highest levels since mid-2002. Net foreign purchases of long-term U.S. Treasury securities slowed sharply, and transactions in short-term securities shifted to net foreign sales.

Other U.S. securities. Net foreign purchases of U.S. securities other than U.S. Treasury securities were a record $235.1 billion in the second quarter, up from $112.3 billion in the first quarter. The sharp increase resulted from a surge in net foreign purchases of U.S. stocks and a shift to net foreign purchases of federally sponsored agency bonds. Net foreign purchases of U.S. corporate bonds slowed but remained strong.

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Net foreign purchases of U.S. stocks were a record $104.2 billion, up sharply from $43.5 billion (chart 9). Net foreign purchases were fueled by a strong rise in U.S. stock prices, largely resulting from continued growth in U.S. corporate profits, robust merger and acquisition activity, and an accelerating stream of stock buybacks. Net purchases from Europe, primarily the United Kingdom, and from Caribbean financial centers increased strongly.

Net foreign purchases of U.S. corporate bonds fell slightly to $101.3 billion from $104.9 billion but remained strong (chart 9). Net foreign purchases continued to be supported by robust U.S. corporate profits, low U.S. bond default rates, and the higher yields available on U.S. corporate bonds than on bonds in most major foreign markets. Net purchases were especially strong in May but slowed sharply in June, when credit spreads began to increase as deteriorating conditions in the market for subprime mortgages led to downgrades of some securities backed by those mortgages. Early in the third quarter, net foreign purchases of U.S. corporate bonds slowed further, as additional downgrades of mortgage-related securities caused spreads to increase in other parts of the U.S. credit market.

Transactions in U.S. federally sponsored agency bonds shifted to net foreign purchases of $29.6 billion from net foreign sales of $36.1 billion. Transactions by investors in Europe and Asia shifted to net purchases from net sales.

U.S. currency. Transactions in U.S. currency shifted to the more typical net U.S. shipments to foreign countries of $3.3 billion in the second quarter from net foreign shipments to the United States of $1.6 billion in the first quarter.

Direct investment. Net financial flows for foreign direct investment in the United States were $73.6 billion in the second quarter, up from $11.9 billion in the first quarter. The substantial pickup was mostly accounted for by a rise in net equity capital investment in the United States and a shift from a decrease to an increase in net intercompany debt investment in the United States. The rise in net equity capital investment, to the highest level since the fourth quarter of 2001, resulted from a few large acquisitions of affiliates and capital injections to existing affiliates, mostly in manufacturing and in finance and insurance. The shift in net intercompany debt investment largely reflected shifts to increases in investment in finance and "other" industries. Reinvested earnings also increased, as earnings increased and distributed earnings decreased.

Revisions to Estimates

The preliminary estimates of U.S. international transactions for the first quarter that were published in the July 2007 SURVEY OF CURRENT BUSINESS have been revised.

The current-account deficit was revised to $197.1 billion from $192.6 billion. The goods deficit was unrevised at $200.9 billion; the services surplus was revised to $23.3 billion from $24.1 billion; the income surplus was revised to $7.5 billion from $10.4 billion; and net unilateral current transfers to foreigners were revised to $27.0 billion from $26.1 billion. Net financial inflows were revised to $181.9 billion from $202.8 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. 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.) In the second quarter, net financial inflows exclude transactions in financial derivatives because data are not yet available. In the first quarter, net financial inflows excluding transactions in financial derivatives were $167.1 billion.

Footnotes to U.S. International Transactions tables 1-11

General notes for all tables: P Preliminary. r Revised. 0 Transactions are possible, but are zero for a given period. (*) Transactions are less than $500,000([+ or -]). D Suppressed to avoid disclosure of data of individual companies. n.a. Transactions are possible, but data are not available.... Not applicable, or for data periods 1960-1997, transactions that are 0, "not available," or "not applicable." Quarterly estimates are not annualized and are expressed at quarterly rates.

Table 1:

1. Credits, +: Exports of goods and services and income receipts; unilateral current transfers to the United States; capital account transactions receipts; financial inflows--increase in foreign-owned assets (U.S. liabilities) or decrease in U.S.-owned assets (U.S. claims).

Debits,-: Imports of goods and services and income payments; unilateral current transfers to foreigners; capital account transactions payments; financial outflows--decrease in foreign-owned assets (U.S. liabilities) or increase in U.S.-owned assets (U.S. claims).

2. Excludes exports of goods under U.S. military agency sales contracts identified in Census export documents, excludes imports of goods under direct defense expenditures identified in Census import documents, and reflects various other adjustments (for valuation, coverage, and timing) of Census statistics to balance of payments basis; see table 2.

3. Includes some goods: Mainly military equipment in line 5; major equipment, other materials, supplies, and petroleum products purchased abroad by U.S. military agencies in line 22; and fuels purchased by airline and steamship operators in lines 8 and 25.

4. Includes transfers of goods and services under U.S. military grant programs.

5. Beginning in 1982, these lines are presented on a gross basis. The definition of exports is revised to exclude U.S. parents' payments to foreign affiliates and to include U.S. affiliates' receipts from foreign parents. The definition of imports is revised to include U.S. parents' payments to foreign affiliates and to exclude U.S. affiliates' receipts from foreign parents.

6. Beginning in 1982, the "other transfers" component includes taxes paid by U.S. private residents to foreign governments and taxes paid by private nonresidents to the U.S. Government.

7. At the present time, all U.S. Treasury-owned gold is held in the United States.

8. Includes sales of foreign obligations to foreigners.

9. Consists of bills, certificates, marketable bonds and notes, and nonmarketable convertible and nonconvertible bonds and notes.

10. Consists of U.S. Treasury and Export-Import Bank obligations, not included elsewhere, and of debt securities of U.S. Government corporations and agencies.

11. Includes, primarily, U.S. Government liabilities associated with military agency sales contracts and other transactions arranged with or through foreign official agencies; see table 5.

12. Consists of investments in U.S. corporate stocks and in debt securities of private corporations and state and local governments.

13. Conceptually, the sum of line 77 and line 39 is equal to "net lending or net borrowing" in the national income and product accounts (NIPAs). However, the foreign transactions account in the NIPAs (a) includes adjustments to the international transactions accounts for the treatment of gold, (b) includes adjustments for the different geographical treatment of transactions with U.S. territories and Puerto Rico, and (c) includes services furnished without payment by financial pension plans except life insurance carriers and private noninsured pension plans. A reconciliation of the balance on goods and services from the international accounts and the NIPA net exports appears in reconciliation table 2 in appendix A in this issue of the SURVEY OF CURRENT BUSINESS. A reconciliation of the other foreign transactions in the two sets of accounts appears in table 4.3B of the full set of NIPA tables. Additional footnotes for historical data in July issues of the SURVEY:

14. For 1974, includes extraordinary U.S. Government transactions with India. See "Special U.S. Government Transactions," June 1974 SURVEY, p. 27.

15. For 1978-83, includes foreign currency-denominated notes sold to private residents abroad.

16. Break in series. See Technical Notes in the June 1989-90, 1992-95, and July 1996-2007 issues of the SURVEY.

Table 2:

1. Exports, Census basis, represent transactions values, f.a.s. U.S. port of exportation, for all years; imports, Census basis, represent Customs values (see Technical Notes in the June 1982 SURVEY), except for 1974-81, when they represent transactions values, f.a.s, foreign port of exportation (see July issues of the SURVEY for historical data). From 1983 forward, both unadjusted and seasonally adjusted data have been prepared by BEA from "actual" and "revised statistical" monthly data supplied by the Census Bureau (see Technical Notes in the December 1985 SURVEY). Seasonally adjusted data reflect the application of seasonal factors developed jointly by Census and BEA. The seasonally adjusted data are the sum of seasonally adjusted five-digit end-use categories (see technical Notes in the June 1980 Survey, in the June 1988 SURVEY, and in the June 1991 SURVEY). Prior to 1983, annual data are as published by the Census Bureau, except that for 1975-80 published Census data are adjusted to include trade between the U.S. Virgin Islands and foreign countries.

2. Adjustments in lines A5 and A13, B20, B75, and B130 reflect the Census Bureau's reconciliation of discrepancies between the goods statistics published by the United States and the counterpart statistics published in Canada. These adjustments are distributed to the affected end-use categories in section C. Beginning in 1986, estimates for undocumented exports to Canada, the largest item in the U.S.-Canadian reconciliation, are included in Census basis data shown in line A1.

3. Exports of military equipment under U.S. military agency sales contracts with foreign governments (line A6), and direct imports by the Department of Defense and the Coast Guard (line A14), to the extent such trade is identifiable from Customs declarations. The exports are included in tables 1 and 11, line 5 (transfers under U.S. military agency sales contracts); the imports are included in tables 1 and 11, line 22 (direct defense expenditures).

4. Addition of electric energy; deduction of exposed motion picture film for rental rather than sale; net change in stock of U.S.-owned grains in storage in Canada; coverage adjustments for special situations in which shipments were omitted from Census data; deduction of the value of repairs and alterations to foreign-owned equipment shipped to the United States for repair; and the inclusion offish exported outside of U.S. customs area. Also includes deduction of exports to the Panama Canal Zone before October 1, 1979, and for 1975-82, net timing adjustments for goods recorded in Census data in one period but found to have been shipped in another (see July issues of the SURVEY for historical data).

5. Coverage adjustments for special situations in which shipments were omitted from Census data; the deduction of the value of repairs and alterations to U.S.-owned equipment shipped abroad for repair; and the adjustment of software imports to market value. Mso includes addition of understatement of inland freight in f.a.s, values of U.S. imports of goods from Canada in 1974-81; deduction of imports from the Panama Canal Zone before October 1, 1979; and for 1975-82, net timing adjustments for goods recorded in Census data in one period but found to have been shipped in another (see July issues of the SURVEY for historical data).

6. For 1988-89, correction for the understatement of crude petroleum imports from Canada.

7. Annual and unadjusted quarterly data shown in this table correspond to country and area data in table I1, lines 3 and 20. Trade with international organizations includes purchases of nonmonetary gold from the International Monetary Fund, transfers of tin to the International Tin Council (ITC), and sales of satellites to Intelsat. The memoranda are defined as follows: Members of OPEC: Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates, Venezuela, and beginning with the first quarter of 2007, Angola.

Table 3:

1. Includes royalties, license fees, and other fees associated with the use of intangible assets, including patents, trade secrets, and other proprietary rights, that are used in connection with the production of goods.

2. Includes royalties, license fees, and other fees associated with the use of copyrights, trademarks, franchises, rights to broadcast live events, software licensing fees, and other intangible property rights.

3. Other unaffiliated services receipts (exports) include mainly film and television tape rentals and expenditures of foreign residents temporarily working in the United States. Payments (imports) include mainly expenditures of U.S. residents temporarily working abroad and film and television tape rentals.

4. These reflect the amount of premiums explicitly charged by, or paid to, insurers and reinsurers.

Table 4:

1. Complete instrument detail is only available beginning with 2003.

2. Prior to 2003, includes only demand deposits and nonnegotiable time and savings deposits.

Table 5:

1. Expenditures to release foreign governments from their contractual liabilities to pay for military goods and services purchased through military sales contracts--first authorized (for Israel) under Public Law 93-199, section 4, and subsequently authorized (for many recipients) under similar legislation-- are included in line A4. Deliveries against these military sales contracts are included in line C10; see footnote 2. Of the line A4 items, part of these military expenditures is applied in lines A43 and A46 to reduce short-term assets previously recorded in lines A41 and C8; this application of funds is excluded from lines C3 and C4. A second part of line A4 expenditures finances future deliveries under military sales contracts for the recipient countries and is applied directly to lines A42 and C9. A third part of line A4, disbursed directly to finance purchases by recipient countries from commercial suppliers in the United States, is included in line A37. A fourth part of line A4, representing dollars paid to the recipient countries to finance purchases from countries other than the United States, is included in line A48.

2. Transactions under military sales contracts are those in which the Department of Defense sells and transfers military goods and services to a foreign purchaser, on a cash or credit basis. Purchases by foreigners directly from commercial suppliers are not included as transactions under military sales contracts. The entries for the several categories of transactions related to military sales contracts in this and other tables are partly estimated from incomplete data.

3. The identification of transactions involving direct dollar outflows from the United States is made in reports by each operating agency.

4. Line A38 includes foreign currency collected as interest and line A43 includes foreign currency collected as principal, as recorded in lines A16 and A17, respectively.

5. Includes (a) advance payments to the Department of Defense (on military sales contracts) financed by loans extended to foreigners by U.S. Government agencies and (b) the contra-entry for the part of line C10 that was delivered without prepayment by the foreign purchaser. Also includes expenditures of appropriations available to release foreign purchasers from liability to make repayment.

6. Includes purchases of loans from U.S. banks and exporters and payments by the U.S. Government under commercial export credit and investment guarantee programs.

7. Excludes liabilities associated with military sales contracts financed by U.S. Government grants and credits and included in line C2.

8. Excludes transactions of the U.S. Enrichment Corporation since it became a non-government entity in July 1998.

Table 6:

1. For bank affiliates, includes only interest on permanent debt investment by their parent companies. Excludes interest between financial parent companies and nonbank financial affiliates.

2. For bank affiliates, includes only permanent debt investment by their parent companies. Excludes intercompany debt between financial parent companies and nonbank financial affiliates.

Table 7:

1. Beginning with 2005, source data for new issue estimates are no longer separately available. New issues continue to be included in net purchases.

2. Bahamas, Bermuda, British West Indies (Cayman Islands), and Netherlands Antilles.

Table 8:

1. Prior to 2003, securities brokers' claims on and liabilities to their foreign affiliates are included in the estimates. They are excluded beginning in 2003.

2. Complete instrument detail is only available beginning with 2003.

3. Financial intermediaries' accounts are shown under "other claims (liabilities)" because the majority of these claims (liabilities) are in the form of inter- company balances. Financial intermediaries' accounts represent transactions between firms in a direct investment relationship (that is, between U.S. parents and their foreign affiliates or between U.S. affiliates and their foreign parent groups), where both the U.S. and foreign firms are classified in a finance industry, but the firms are neither banks nor securities brokers.

4. Bahamas, Bermuda, British West Indies (Cayman Islands), and Netherlands Antilles.

Table 9:

1. Beginning with 2003, includes securities brokers' claims on their foreign affiliates.

2. Complete instrument detail is only available beginning with 2003.

3. Includes foreign official agencies and international and regional organizations. Prior to 2003, also includes government-owned corporations and state, provincial, and local governments and their agencies.

4. U.S.-owned banks include U.S.-chartered banks, Edge Act subsidiaries, and U.S. bank holding companies. Foreign-owned banks include U.S. branches and agencies of foreign banks and majority-owned bank subsidiaries in the United States. Brokers and dealers may be U.S.-owned or foreign-owned.

5. Commercial paper issued in the U.S. market by foreign incorporated entities and held in U.S. customers' accounts. Excludes commercial paper issued through foreign direct investment affiliates in the United States.

6. Prior to 2003, includes negotiable certificates of deposit and other negotiable and transferable instruments.

7. Prior to 2003, includes only deposits.

8. Bahamas, Bermuda, British West Indies (Cayman Islands), and Netherlands Antilles.

Table 10:

1. Beginning with 2003, includes securities brokers' liabilities to their foreign affiliates.

2. Complete instrument detail is only available beginning with 2003.

3. U.S.-owned banks include U.S.-chartered banks, Edge Act subsidiaries, and U.S. bank holding companies. Foreign-owned banks include U.S. branches and agencies of foreign banks and majority-owned bank subsidiaries in the United States. Brokers and dealers may be U.S.-owned or foreign-owned.

4. Bahamas, Bermuda, British West Indies (Cayman Islands), and Netherlands Antilles.

Table 11:

For footnotes 1-13, see table 1.

14. At the global level, the statistical discrepancy represents net errors and omissions in recorded transactions. For individual countries and regions, it may also reflect discrepancies that arise when transactions with one country or region are settled through transactions with another country or region.

15. The "European Union" includes Belgium, Denmark, France, Germany (includes the former German Democratic Republic (East Germany) beginning in the fourth quarter of 1990), Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, and the United Kingdom; beginning with the first quarter of 1995, also includes Austria, Finland, and Sweden; beginning with the second quarter of 2004, also includes Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia; and beginning with the first quarter of 2007, also includes Bulgaria and Romania. The "European Union" also includes the European Atomic Energy Community, the European Coal and Steel Community (through the third quarter of 2002), and the European Investment Bank.

16. The "Euro area" includes Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Portugal, and Spain; beginning with the first quarter of 2001, also includes Greece; and beginning with the first quarter of 2007, also includes Slovenia.

17. Details not shown separately; see totals in lines 56 and 63.

18. Details not shown separately are included in line 69.

19. Estimates of financial derivatives for several countries are not available separately. Estimates for Luxembourg are included in Other Euro area. Estimates for Argentina, Brazil, Mexico, and Venezuela are included in Other South and Central America. Estimates for China, Hong Kong, India, Korea, Singapore, and Taiwan are included in Other Asia and Pacific. Estimates for South Africa are included in Other Africa. In addition, estimates for the Middle East are combined with estimates for Asia and Pacific and included in Other Asia and Pacific.

20. Includes, as part of international and unallocated, taxes withheld; current- cost adjustments associated with U.S. and foreign direct investment; and net U.S. currency flows. Before 1999, also includes the estimated direct investment in foreign affiliates engaged in international shipping, in operating oil and gas drilling equipment internationally, and in petroleum trading. Before 1996, also includes small transactions in business services that are not reported by country.

NOTE. Country data are based on information available from U.S. reporting sources. In some instances, the statistics may not necessarily, reflect the ultimate foreign transactor. For instance: U.S. goods export statistics reflect country of reported destination; in many cases the goods may be transshipped to third countries (especially true for the Netherlands and Germany). The geographic breakdown of securities transactions reflects the country with which transactions occurred but may not necessarily reflect the ultimate sources of foreign funds or ultimate destination of U.S. funds.

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

 Corresponding lines in tables 1 and
 11 are indicated in ( )
Line (Credits +; debits-) 2005 2006

 Current account

 1 Exports of goods and services and
 income receipts (1) 1,788,557 2,096,165
 2 Goods, balance of payments
 basis (3) 894,631 1,023,109
 3 Services (4) 388,439 422,594
 4 Income receipts (12) 505,488 650,462

 5 Imports of goods and services and
 income payments (18) -2,454,871 -2,818,047
 6 Goods, balance of payments
 basis (20) -1,681,780 -1,861,380
 7 Services (21) -315,661 -342,845
 8 Income payments (29) -457,430 -613,823
 9 Unilateral current transfers,
 net (35) -88,535 -89,595

 Capital account

 10 Capital account transactions, net (39) -4,054 -3,913

 Financial account

 11 U.S.-owned assets abroad, excluding
 financial derivatives (increase/
 financial outflow (-)) (40) -426,875 -1,055,176
 12 U.S. official reserve assets (41) 14,096 2,374
 13 U.S. Government assets, other than
 official reserve assets (46) 5,539 5,346
 14 U.S private assets (50) -446,510 -1,062,896

 15 Foreign-owned assets in the United
 States, excluding financial
 derivatives (increase/financial
 inflow (+)) (55) 1,204,231 1,859,597
 16 Foreign official assets in the
 United States (56) 259,268 440,264
 17 Other foreign assets in the United
 States (63) 944,963 1,419,333

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

 19 Statistical discrepancy (sum of above
 items with sign reversed) (71) -18,454 -17,794

 Memoranda:
 20 Balance on current account (77) -754,848 -811,477
 21 Net financial flows (40, 55, and 70) 777,356 833,183

 Corresponding lines in tables 1 and 2006
 11 are indicated in ( )
Line (Credits +; debits-) I II

 Current account

 1 Exports of goods and services and
 income receipts (1) 494,027 518,595
 2 Goods, balance of payments
 basis (3) 243,880 252,458
 3 Services (4) 101,756 104,117
 4 Income receipts (12) 148,391 162,020

 5 Imports of goods and services and
 income payments (18) -673,277 -700,504
 6 Goods, balance of payments
 basis (20) -451,637 -463,734
 7 Services (21) -83,711 -85,419
 8 Income payments (29) -137,929 -151,352
 9 Unilateral current transfers,
 net (35) -21,360 -23,686

 Capital account

 10 Capital account transactions, net (39) -1,724 -1,008

 Financial account

 11 U.S.-owned assets abroad, excluding
 financial derivatives (increase/
 financial outflow (-)) (40) -344,032 -212,218
 12 U.S. official reserve assets (41) 513 -560
 13 U.S. Government assets, other than
 official reserve assets (46) 1,049 1,765
 14 U.S private assets (50) -345,594 -213,423

 15 Foreign-owned assets in the United
 States, excluding financial
 derivatives (increase/financial
 inflow (+)) (55) 538,140 355,442
 16 Foreign official assets in the
 United States (56) 125,257 120,861
 17 Other foreign assets in the United
 States (63) 412,883 234,581

 18 Financial derivatives, net (70) 1,633 14,001

 19 Statistical discrepancy (sum of above
 items with sign reversed) (71) 6,593 49,378

 Memoranda:
 20 Balance on current account (77) -200,611 -205,595
 21 Net financial flows (40, 55, and 70) 195,741 157,225

 Corresponding lines in tables 1 and 2006
 11 are indicated in ( )
Line (Credits +; debits-) III IV

 Current account

 1 Exports of goods and services and
 income receipts (1) 532,894 550,649
 2 Goods, balance of payments
 basis (3) 260,285 266,486
 3 Services (4) 105,583 111,137
 4 Income receipts (12) 167,026 173,025

 5 Imports of goods and services and
 income payments (18) -726,352 -717,914
 6 Goods, balance of payments
 basis (20) -479,184 -466,825
 7 Services (21) -85,991 -87,724
 8 Income payments (29) -161,177 -163,365
 9 Unilateral current transfers,
 net (35) -23,877 -20,673

 Capital account

 10 Capital account transactions, net (39) -545 -637

 Financial account

 11 U.S.-owned assets abroad, excluding
 financial derivatives (increase/
 financial outflow (-)) (40) -209,898 -289,028
 12 U.S. official reserve assets (41) 1,006 1,415
 13 U.S. Government assets, other than
 official reserve assets (46) 1,570 962
 14 U.S private assets (50) -212,474 -291,405

 15 Foreign-owned assets in the United
 States, excluding financial
 derivatives (increase/financial
 inflow (+)) (55) 449,987 516,029
 16 Foreign official assets in the
 United States (56) 108,799 85,347
 17 Other foreign assets in the United
 States (63) 341,188 430,682

 18 Financial derivatives, net (70) 14,911 -1,783

 19 Statistical discrepancy (sum of above
 items with sign reversed) (71) -37,121 -36,643

 Memoranda:
 20 Balance on current account (77) -217,334 -187,938
 21 Net financial flows (40, 55, and 70) 255,000 225,218

 Corresponding lines in tables 1 and 2007
 11 are indicated in ( )
Line (Credits +; debits-) I (r) II (p)

 Current account

 1 Exports of goods and services and
 income receipts (1) 558,369 586,698
 2 Goods, balance of payments
 basis (3) 270,116 279,339
 3 Services (4) 112,040 116,350
 4 Income receipts (12) 176,213 191,009

 5 Imports of goods and services and
 income payments (18) -728,472 -755,031
 6 Goods, balance of payments
 basis (20) -470,983 -483,552
 7 Services (21) -88,754 -89,825
 8 Income payments (29) -168,735 -181,654
 9 Unilateral current transfers,
 net (35) -26,994 -22,457

 Capital account

 10 Capital account transactions, net (39) -559 -589

 Financial account

 11 U.S.-owned assets abroad, excluding
 financial derivatives (increase/
 financial outflow (-)) (40) -449,454 -469,470
 12 U.S. official reserve assets (41) -72 26
 13 U.S. Government assets, other than
 official reserve assets (46) 445 -493
 14 U.S private assets (50) -449,827 -469,003

 15 Foreign-owned assets in the United
 States, excluding financial
 derivatives (increase/financial
 inflow (+)) (55) 616,602 620,405
 16 Foreign official assets in the
 United States (56) 152,193 70,098
 17 Other foreign assets in the United
 States (63) 464,409 550,307

 18 Financial derivatives, net (70) 14,800 n.a.

 19 Statistical discrepancy (sum of above
 items with sign reversed) (71) 15,708 40,444

 Memoranda:
 20 Balance on current account (77) -197,097 -190,790
 21 Net financial flows (40, 55, and 70) 181,948 150,935

 Corresponding lines in tables 1 and
 11 are indicated in ( ) Change:
Line (Credits +; debits-) 2007:I-II

 Current account

 1 Exports of goods and services and
 income receipts (1) 28,329
 2 Goods, balance of payments
 basis (3) 9,223
 3 Services (4) 4,310
 4 Income receipts (12) 14,796

 5 Imports of goods and services and
 income payments (18) -26,559
 6 Goods, balance of payments
 basis (20) -12,569
 7 Services (21) -1,071
 8 Income payments (29) -12,919
 9 Unilateral current transfers,
 net (35) 4,537

 Capital account

 10 Capital account transactions, net (39) -30

 Financial account

 11 U.S.-owned assets abroad, excluding
 financial derivatives (increase/
 financial outflow (-)) (40) -20,016
 12 U.S. official reserve assets (41) 98
 13 U.S. Government assets, other than
 official reserve assets (46) -938
 14 U.S private assets (50) -19,176

 15 Foreign-owned assets in the United
 States, excluding financial
 derivatives (increase/financial
 inflow (+)) (55) 3,803
 16 Foreign official assets in the
 United States (56) -82,095
 17 Other foreign assets in the United
 States (63) 85,898

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

 19 Statistical discrepancy (sum of above
 items with sign reversed) (71) 24,736

 Memoranda:
 20 Balance on current account (77) 6,307
 21 Net financial flows (40, 55, and 70) -31,013

(p) Preliminary

(r) Revised

n.a. Not available

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

 2006 2007

 II III IV I II

Nominal: (1)
 Broad (2) 94.9 94.4 93.9 93.7 91.5
 Major currencies (3) 86.8 86.3 86.3 86.7 83.9
 Other important trading
 partners (4) 105.5 105.0 103.7 102.9 101.2
Real: (1)
 Broad (2) 98.4 98.1 96.0 95.9 95.0
 Major currencies (3) 94.9 94.7 93.8 94.6 92.8
 Other important trading
 partners (4) 102.3 101.9 98.5 97.5 97.5
Selected currencies:
 (nominal) (5)
 Canada 73.9 73.8 75.0 77.1 72.3
 European currencies:
 Euro area (6) 92.2 91.0 89.9 88.4 86.0
 United Kingdom 90.4 88.0 86.1 84.4 83.1
 Switzerland 89.8 89.4 89.1 89.0 88.2
 Japan 101.0 102.7 104.0 105.4 106.6
 Mexico 110.4 108.1 107.5 108.8 107.4
 Brazil 144.3 143.5 142.2 139.3 131.1

 2006

 June July Aug. Sept. Oct.

Nominal: (1)
 Broad (2) 95.0 94.8 94.1 94.4 94.6
 Major currencies (3) 86.3 86.7 85.9 86.4 87.2
 Other important trading
 partners (4) 106.4 105.3 104.8 104.8 104.4
Real: (1)
 Broad (2) 98.7 98.6 98.0 97.6 97.1
 Major currencies (3) 94.5 95.2 94.4 94.5 94.9
 Other important trading
 partners (4) 103.5 102.5 102.1 101.1 99.6
Selected currencies:
 (nominal) (5)
 Canada 73.3 74.3 73.6 73.5 74.3
 European currencies:
 Euro area (6) 91.5 91.4 90.5 91.1 91.9
 United Kingdom 89.5 89.5 87.1 87.6 87.9
 Switzerland 88.9 89.3 88.9 89.9 90.9
 Japan 101.2 102.3 103.5 103.5 104.7
 Mexico 112.5 108.4 107.4 108.5 107.5
 Brazil 148.8 144.7 142.5 143.4 141.9

 2006 2007

 Nov. Dec. Jan. Feb. March

Nominal: (1)
 Broad (2) 93.9 93.2 94.1 93.8 93.3
 Major currencies (3) 86.2 85.6 87.2 86.9 86.0
 Other important trading
 partners (4) 103.8 103.0 103.1 102.8 102.8
Real: (1)
 Broad (2) 95.8 95.0 96.1 95.7 96.0
 Major currencies (3) 93.6 92.8 94.7 94.8 94.4
 Other important trading
 partners (4) 98.4 97.4 97.7 96.9 97.9
Selected currencies:
 (nominal) (5)
 Canada 74.8 75.9 77.4 77.1 76.9
 European currencies:
 Euro area (6) 89.9 87.8 89.2 88.6 87.5
 United Kingdom 86.3 84.0 84.2 84.3 84.8
 Switzerland 89.2 87.3 89.7 89.4 87.9
 Japan 103.6 103.6 106.3 106.4 103.5
 Mexico 107.8 107.2 108.2 108.6 109.7
 Brazil 142.6 142.0 141.4 138.5 138.1

 2007

 April May June

Nominal: (1)
 Broad (2) 92.1 91.3 91.0
 Major currencies (3) 84.5 83.8 83.5
 Other important trading
 partners (4) 101.9 101.0 100.8
Real: (1)
 Broad (2) 95.3 95.0 94.7
 Major currencies (3) 93.2 92.8 92.6
 Other important trading
 partners (4) 97.8 97.5 97.3
Selected currencies:
 (nominal) (5)
 Canada 74.7 72.1 701.0
 European currencies:
 Euro area (6) 85.8 85.7 86.4
 United Kingdom 83.1 83.2 83.1
 Switzerland 87.5 88.1 89.0
 Japan 105.0 106.6 108.3
 Mexico 108.4 106.9 107.0
 Brazil 134.3 131.2 127.8

(1.) For more information on the nominal and real indexes of the
foreign exchange value of the U.S. dollar, see Federal Reserve
Bulletin, vol. 84 (October 1998): 811-18.

(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.

Table C. 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

 2005 2006 I II

Exports 894,631 1,023,109 243,880 252,458
 Agricultural products 64,887 72,869 17,309 18,028
 Nonagricultural products 829,744 950,240 226,571 234,430
Imports 1,661,780 1,861,380 451,637 463,734
 Petroleum and products 251,856 302,430 73,362 78,713
 Nonpetroleum products 1,429,924 1,558,950 378,275 385,021

 Current dollars

 2006 2007

 III IV I II (p)

Exports 260,285 266,486 270,116 279,339
 Agricultural products 18,689 18,843 19,826 21,781
 Nonagricultural products 241,596 247,643 250,290 257,558
Imports 479,184 466,825 470,983 483,552
 Petroleum and products 82,768 67,587 70,852 78,139
 Nonpetroleum products 396,416 399,238 400,131 405,413

 Chained (2000) dollars (1)

 2006

 2005 (r) 2006 (r) I (r) II (r)

Exports 831,967 920,741 223,434 227,805
 Agricultural products 53,553 58,085 14,234 14,732
 Nonagricultural products 779,871 864,444 209,617 213,471
Imports 1,535,115 1,630,244 402,956 403,626
 Petroleum and products 141,012 138,180 36,554 33,892
 Nonpetroleum products 1,396,656 1,504,894 367,051 373,187

 Chained (2000) dollars (1)

 2006 2007

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

Exports 231,902 237,389 238,576 243,700
 Agricultural products 14,802 14,320 14,171 15,290
 Nonagricultural products 217,529 223,642 225,026 228,833
Imports 411,681 411,877 414,780 413,066
 Petroleum and products 34,169 33,566 35,815 33,627
 Nonpetroleum products 381,477 383,058 381,928 384,427

 Percent change from previous
 period (current dollars)

 2006

 2005 2006 I II

Exports 10.8 14.4 4.7 3.5
 Agricultural products 3.1 12.3 4.5 4.2
 Nonagricultural products 11.4 14.5 4.8 3.5
Imports 13.9 10.7 0.9 2.7
 Petroleum and products 39.6 20.1 -1.1 7.3
 Nonpetroleum products 10.3 9.0 1.3 1.8

 Percent change from previous
 period (current dollars)

 2006 2007

 III IV I II (p)

Exports 3.1 2.4 1.4 3.4
 Agricultural products 3.7 0.8 5.2 9.9
 Nonagricultural products 3.1 2.5 1.1 2.9
Imports 3.3 -2.6 0.9 2.7
 Petroleum and products 5.2 -18 4.8 10.3
 Nonpetroleum products 3.0 0.7 0.2 1.3

 Percent change from previous period
 (chained (2000) dollars)

 2006

 2005 (r) 2006 (r) I (r) II (r)

Exports 7.5 10.7 4.0 2.0
 Agricultural products 5.2 8.5 4.6 3.5
 Nonagricultural products 7.7 10.8 3.9 1.8
Imports 7.0 6.2 1.4 0.2
 Petroleum and products 2.3 -2.0 -0.9 -7.3
 Nonpetroleum products 7.6 7.7 1.8 1.7

 Percent change from previous period
 (chained (2000) dollars)

 2006 2007

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

Exports 1.8 2.4 0.5 2.1
 Agricultural products 0.5 -3.3 -1.0 7.9
 Nonagricultural products 1.9 2.8 0.6 1.7
Imports 2.0 0.0 0.7 -0.4
 Petroleum and products 0.8 -1.8 6.7 -6.1
 Nonpetroleum products 2.2 0.4 -0.3 0.7

(r) Revised

(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.