First Quarter 2018

The U.S. current-account deficit--a net measure of transactions between the United States and the rest of the world in goods, services, primary income, and secondary income--increased to $124.1 billion (preliminary) in the first quarter of 2018 from $116.1 billion (revised) in the fourth quarter of 2017 (chart 1 and table A). The deficit was 2.5 percent of current-dollar gross domestic product (GDP) in the first quarter, up from 2.4 percent in the fourth quarter.

The $8.0 billion increase in the current-account deficit reflected an $8.1 billion increase in the deficit on goods and relatively small, nearly offsetting changes in the balances on services, primary income, and secondary income.

Net U.S. borrowing measured by financial-account transactions was $180.6 billion in the first quarter, an increase from net borrowing of $31.3 billion in the fourth quarter

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

                                                     2017
                                         II (r)     III (r)    IV (p)

Current account
Exports of goods and                     839,280    868,997    890,393
services and income
receipts (credits)
  Exports of goods and services          579,743    589,107    605,916
    Goods                                382,492    387,814    401,939
    Services                             197,252    201,293    203,977
  Primary income receipts                223,979    237,632    248,940
  Secondary income (current               35,557     42,258     35,537
  transfer) receipts
Imports of goods and                     961,117    972,445  1,006,541
services and income
payments (debits)
  Imports of goods                       716,443    721,899    753,742
  and services
    Goods                                582,440    584,637    614,317
    Services                             134,004    137,261    139,426
  Primary income payments                175,444    179,410    186,569
  Secondary income (current               69,229     71,136     66,229
  transfer) payments
Capital account
Capital transfer receipts                      0     24,788          0
and other credits
Capital transfer payments                      0          1         40
and other debits
Financial account
Net U.S. acquisition of                  315,922    373,591    127,135
financial assets excluding
financial derivatives
(net increase
in assets /financial outflow (+))
  Direct investment assets                49,976    102,936     91,256
  Portfolio investment assets            180,700    175,910     88,301
  Other investment assets                 85,095     94,804    -50,883
  Reserve assets                             150        -61     -1,539
Net U.S. incurrence of                   445,338    504,082    159,164
liabilities excluding financial
derivatives (net increase
in liabilities /
financial inflow (+))
  Direct investment liabilities           97,118    107,107     38,250
  Portfolio investment liabilities       263,170    294,275     81,626
  Other investment liabilities            85,050    102,701     39,288
Financial derivatives other                9,306     18,600        777
than reserves, net transactions
Statistical discrepancy
Statistical discrepancy (1)                1,727    -33,231     84,936
Balances
Balance on current                      -121,837   -103,447   -116,148
account
  Balance on goods and                  -136,700   -132,791   -147,826
  services
    Balance on goods                    -199,948   -196,823   -212,378
    Balance on services                   63,248     64,032     64,551
  Balance on primary                      48,535     58,222     62,371
  income
  Balance on secondary                   -33,672    -28,878    -30,692
  income
Balance on capital                             0     24,787        -40
account
Net lending (+) or net                  -121,837    -78,660   -116,188
borrowing (-) from
current- and capital-account
transactions (2)
Net lending (+) or net                  -120,111   -111,891    -31,252
borrowing (-) from
financial-account
transactions (3)

                                            2018        Change
                                                       2017:IV
                                                       to 2018:1
                                            I (p)

Current account
Exports of goods and                        913,358      22,965
services and income
receipts (credits)
  Exports of goods and services             619,243      13,327
    Goods                                   411,416       9,477
    Services                                207,828       3,851
  Primary income receipts                   258,786       9,846
  Secondary income (current                  35,329        -208
  transfer) receipts
Imports of goods and                      1,037,464      30,923
services and income
payments (debits)
  Imports of goods                          774,870      21,128
  and services
    Goods                                   631,934      17,617
    Services                                142,936       3,510
  Primary income payments                   196,775      10,206
  Secondary income (current                  65,819        -410
  transfer) payments
Capital account
Capital transfer receipts                         0           0
and other credits
Capital transfer payments                      n.a.        n.a.
and other debits
Financial account
Net U.S. acquisition of                     254,728     127,593
financial assets excluding
financial derivatives
(net increase
in assets /financial outflow (+))
  Direct investment assets                 -119,662    -210,918
  Portfolio investment assets               365,467     277,166
  Other investment assets                     8,930      59,813
  Reserve assets                                 -7       1,532
Net U.S. incurrence of                      464,054     304,890
liabilities excluding financial
derivatives (net increase
in liabilities /
financial inflow (+))
  Direct investment liabilities              97,344      59,094
  Portfolio investment liabilities          292,084     210,458
  Other investment liabilities               74,626      35,338
Financial derivatives other                  28,678      27,901
than reserves, net transactions
Statistical discrepancy
Statistical discrepancy (1)                 -56,544    -141,480
Balances
Balance on current                         -124,105      -7,957
account
  Balance on goods and                     -155,626      -7,800
  services
    Balance on goods                       -220,518      -8,140
    Balance on services                      64,892         341
  Balance on primary                         62,012        -359
  income
  Balance on secondary                      -30,491         201
  income
Balance on capital                                0          40
account
Net lending (+) or net                     -124,105      -7,917
borrowing (-) from
current- and capital-account
transactions (2)
Net lending (+) or net                     -180,649    -149,397
borrowing (-) from
financial-account
transactions (3)

p Preliminary
r Revised
n.a. Not available
1. The statistical discrepancy is the difference between net
acquisition of financial assets and net incurrence of liabilities in
the financial account (including financial derivatives) less the
difference between total credits and total debits recorded in the
current and capital accounts.
2. Sum of current- and capital-account balances.
3. Sum of net U.S. acquisition of financial assets and net transactions
in financial derivatives less net U.S. incurrence of liabilities.
Note. The statistics are presented in table 1.2 on BEA's website.

Data Availability and Methodology

Detailed statistics for U.S. international transactions accompany this article in tables 1.1-9.1. The statistics and a description of the estimation methods are also available on BEA's website. The links in the text and tables of this article provide the latest available statistics in the interactive tables.

For the statistics, see "International Data." For the methods, see U.S. International Economic Accounts: Concepts and Methods.

Overview

Current-account highlights

* The deficit on goods increased $8.1 billion in the first quarter to $220.5 billion.

* The surplus on primary income decreased $0.4 billion to $62.0 billion.

* The surplus on services increased $0.3 billion to $64.9 billion.

* The deficit on secondary income decreased $0.2 billion to $30.5 billion.

Financial-account highlights

* Net U.S. acquisition of financial assets excluding financial derivatives increased $127.6 billion to $254.7 billion (chart 2).

* Net U.S. incurrence of liabilities excluding financial derivatives increased $304.9 billion to $464.1 billion.

* Transactions in financial derivatives other than reserves reflected first-quarter net lending of $28.7 billion, a $27.9 billion increase from the fourth quarter.

Statistical discrepancy

The statistical discrepancy was -$56.5 billion in the first quarter following a statistical discrepancy of $84.9 billion in the fourth quarter.

Current Account--Exports of Goods and Services and Income Receipts

Exports of goods and services and income receipts increased $23.0 billion, or 2.6 percent, in the first quarter to $913.4 billion (charts 3 and 4 and table B).

* Primary income receipts increased $9.8 billion, or 4.0 percent, to $258.8 billion, reflecting increases in direct investment income, portfolio investment income, and other investment income. For more information on direct investment income, see "Effects of the 2017 Tax Cuts and lobs Act on Components of Direct Investment."

* Goods exports increased $9.5 billion, or 2.4 percent, to $411.4 billion, mostly reflecting increases in automotive vehicles, parts, and engines, in consumer goods, primarily jewelry and collectibles, and in nonmonetary gold.

Table B. Exports of Goods and Services and Income Receipts
[Millions of dollars, seasonally adjusted]

                                                 2017
                                     II (r)    III (r)   IV (p)

  Exports of goods                   839,280   868,997   890,393
  and services and
  income receipts
Exports of goods                     382,492   387,814   401,939
 General merchandise                 376,756   382,828   397,143
  Foods, feeds, and                   33,752    34,209    32,099
  beverages
  Industrial supplies and            110,346   111,819   124,271
  materials
   Energy products                    38,318    38,716    46,234
    Of which: Petroleum               32,441    33,122    40,384
    and products
   Nonenergy products                 72,028    73,103    78,037
  Capital goods except               130,882   134,985   137,341
  automotive
  Automotive vehicles, parts,         39,047    39,078    39,761
  and engines
  Consumer goods except               49,198    48,879    49,807
  food and automotive
  Other general merchandise           13,531    13,858    13,866
 Net exports of goods                     47        47        56
 under merchanting
 Nonmonetary gold                      5,689     4,940     4,740
Exports of services (1)              197,252   201,293   203,977
 Maintenance and repair                6,574     6,213     6,740
 services n.i.e.
 Transport                            21,756    22,483    22,696
 Travel (for all purposes             52,391    52,980    53,429
 including education)
  Business                             9,931     9,906     9,956
  Personal                            42,460    43,074    43,473
 Insurance services                    4,392     4,708     4,755
 Financial services                   26,854    27,927    28,751
 Charges for the use                  32,214    32,273    32,762
 of intellectual property n.i.e.
 Telecommunications, computer, and    10,341    10,735    10,902
 information services
 Other business services              37,886    38,936    39,326
 Government goods and                  4,844     5,037     4,617
 services n.i.e.
Primary income receipts              223,979   237,632   248,940
 Investment income                   222,406   236,058   247,367
  Direct investment income           120,486   127,799   135,929
  Portfolio investment income         86,627    91,154    93,614
   Income on equity and               57,597    61,241    62,535
   investment fund shares
   Interest on debt securities        29,031    29,913    31,078
  Other investment income             15,158    16,996    17,741
  Reserve asset income                   135       109        82
 Compensation of employees             1,573     1,573     1,573
Secondary income (current             35,557    42,258    35,537
transfer) receipts (2)

                                              2018      Change 2017:IV
                                                        to 2018:I
                                              I (p)

  Exports of goods                            913,358   22,965
  and services and
  income receipts
Exports of goods                              411,416    9,477
 General merchandise                          404,919    7,776
  Foods, feeds, and                            33,338    1,239
  beverages
  Industrial supplies and                     125,403    1,132
  materials
   Energy products                             46,945      711
    Of which: Petroleum                        40,071     -313
    and products
   Nonenergy products                          78,458      421
  Capital goods except                        138,209      868
  automotive
  Automotive vehicles, parts,                  42,207    2,446
  and engines
  Consumer goods except                        51,598    1,791
  food and automotive
  Other general merchandise                    14,163      297
 Net exports of goods                              47       -9
 under merchanting
 Nonmonetary gold                               6,450    1,710
Exports of services (1)                       207,828    3,851
 Maintenance and repair                         7,171      431
 services n.i.e.
 Transport                                     23,116      420
 Travel (for all purposes                      53,800      371
 including education)
  Business                                      9,918      -38
  Personal                                     43,882      409
 Insurance services                             4,862      107
 Financial services                            29,443      692
 Charges for the use                           33,359      597
 of intellectual property n.i.e.
 Telecommunications, computer, and             11,184      282
 information services
 Other business services                       40,144      818
 Government goods and                           4,748      131
 services n.i.e.
Primary income receipts                       258,786    9,846
 Investment income                            257,193    9,826
  Direct investment income                    137,995    2,066
  Portfolio investment income                  98,978    5,364
   Income on equity and                        65,997    3,462
   investment fund shares
   Interest on debt securities                 32,981    1,903
  Other investment income                      20,051    2,310
  Reserve asset income                            169       87
 Compensation of employees                      1,593       20
Secondary income (current                      35,329     -208
transfer) receipts (2)

p Preliminary
r Revised
n.i.e. Not included elsewhere
1. See also Alexis N. Grimm and Shari Allen, "U.S. International
Services: Trade in Services in 2016 and Services Supplied Through
Affiliates in 2015," Survey of Current Business 97 (October 2017).
2. Secondary income payments include U.S. government and private
transfers, such as U.S. government grants and pensions, fines and
penalties, withholding taxes, personal transfers (remittances),
insurance-related transfers, and other current transfers.
Note. The statistics are presented in table 1.2, table 2.1, table 3.1,
table 4.1, and table 5.1 on BEA's website.

Current Account--Imports of Goods and Services and Income Payments

Imports of goods and services and income payments increased $30.9 billion, or 3.1 percent, in the first quarter to $1,037.5 billion (charts 3 and 5 and table C).

* Goods imports increased $17.6 billion, or 2.9 percent, to $631.9 billion, mostly reflecting increases in industrial supplies and materials, primarily petroleum and products, and in consumer goods, primarily medicinal, dental, and pharmaceutical products.

* Primary income payments increased $10.2 billion, or 5.5 percent, to $196.8 billion, reflecting increases in direct investment income, portfolio investment income, and other investment income.

Table C. Imports of Goods and Services and Income Payments
[Millions of dollars, seasonally adjusted]

                                                         2017

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

    Imports of goods                       961,117   972,445   1,006,541
    and services and income
    payments
Imports of goods                           582,440   584,637     614,317
  General merchandise                      579,845   581,849     610,844
    Foods, feeds, and beverages             34,470    35,069      35,551
    Industrial supplies and                125,834   123,450     133,707
    materials
      Energy products                       52,427    49,448      55,863
        Of which: Petroleum                 48,025    45,444      51,926
        and products
      Nonenergy products                    73,407    74,002      77,844
    Capital goods except                   157,945   163,218     169,186
    automotive
    Automotive vehicles, parts,             89,551    89,455      90,589
    and engines
    Consumer goods except                  149,365   148,197     157,597
    food and automotive
    Other general merchandise               22,679    22,460      24,214
  Nonmonetary gold                           2,594     2,789       3,473
Imports of services (1)                    134,004   137,261     139,426
  Maintenance and repair services n.i.e.     2,136     2,004       2,059
  Transport                                 25,319    25,352      25,872
  Travel (for all purposes                  33,525    33,813      34,906
  including education)
    Business                                 4,220     4,147       4,140
    Personal                                29,306    29,666      30,766
  Insurance services                        12,820    13,094      12,434
  Financial services                         7,076     7,478       7,628
  Charges for the use                       12,298    13,136      13,808
  of intellectual property n.i.e.
  Telecommunications, computer,              9,805    10,068      10,280
  and information services
  Other business services                   25,549    26,774      26,929
  Government goods and                       5,477     5,541       5,510
  services n.i.e.
Primary income payments                    175,444   179,410     186,569
  Investment income                        170,545   174,430     181,601
    Direct investment income                52,298    51,342      55,978
    Portfolio investment income            106,870   109,845     111,305
      Income on equity and                  36,032    36,670      36,625
      investment fund shares
      Interest on debt securities           70,838    73,175      74,680
    Other investment income                 11,377    13,243      14,317
  Compensation of employees                  4,899     4,980       4,969
Secondary income (current                   69,229    71,136      66,229
transfer) payments (2)

                                             2018         Change 2017:IV
                                                           to 2018:I
                                             I (p)

    Imports of goods                         1,037,464     30,923
    and services and income
    payments
Imports of goods                               631,934     17,617
  General merchandise                          629,125     18,281
    Foods, feeds, and beverages                 37,014      1,463
    Industrial supplies and                    142,001      8,294
    materials
      Energy products                           61,760      5,897
        Of which: Petroleum                     58,352      6,426
        and products
      Nonenergy products                        80,241      2,397
    Capital goods except                       170,589      1,403
    automotive
    Automotive vehicles, parts,                 92,885      2,296
    and engines
    Consumer goods except                      164,007      6,410
    food and automotive
    Other general merchandise                   22,630     -1,584
  Nonmonetary gold                               2,809       -664
Imports of services (1)                        142,936      3,510
  Maintenance and repair services n.i.e.         2,016        -43
  Transport                                     26,284        412
  Travel (for all purposes                      35,615        709
  including education)
    Business                                     4,189         49
    Personal                                    31,426        660
  Insurance services                            12,095       -339
  Financial services                             7,965        337
  Charges for the use                           15,318      1,510
  of intellectual property n.i.e.
  Telecommunications, computer,                 10,465        185
  and information services
  Other business services                       27,607        678
  Government goods and                           5,572         62
  services n.i.e.
Primary income payments                        196,775     10,206
  Investment income                            191,803     10,202
    Direct investment income                    58,914      2,936
    Portfolio investment income                115,353      4,048
      Income on equity and                      38,841      2,216
      investment fund shares
      Interest on debt securities               76,512      1,832
    Other investment income                     17,536      3,219
  Compensation of employees                      4,972          3
Secondary income (current                       65,819       -410
transfer) payments (2)

p Preliminary
r Revised
n.i.e. Not included elsewhere
1. See also Alexis N. Grimm and Shari Allen, "U.S. International
Services: Trade in Services in 2016 and Services Supplied Through
Affiliates in 2015," Survey of Current Business 97 (October 2017).
2. Secondary income payments include U.S. government and private
transfers, such as U.S. government grants and pensions, fines and
penalties, withholding taxes, personal transfers (remittances),
insurance-related transfers, and other current transfers.
Note. The statistics are presented in table 1.2, table 2.1, table 3.1,
table 4.1, and table 5.1 on BEA's website.

Financial Account

Acquisition of financial assets

* Net U.S. acquisition of portfolio investment assets increased $277.2 billion to $365.5 billion, reflecting net U.S. purchases of foreign equity and investment fund shares following net sales in the fourth quarter (chart 6 and table D).

* Net U.S. acquisition of other investment assets was $8.9 billion, following net liquidation of $50.9 billion in the fourth quarter. This change mostly reflected net U.S. provision of loans to foreigners, following net foreign repayment in the fourth quarter.

* Net U.S. withdrawal of direct investment assets was $119.7 billion, following net U.S. acquisition of $91.3 billion in the fourth quarter. This change partly offset the changes in portfolio investment assets and other investment assets. The net withdrawal of direct investment assets reflected U.S. parent repatriation of previously reinvested earnings. For more information, see "Effects of the 2017 Tax Cuts and lobs Act on Components of Direct Investment."

Table D. Net U.S. Acquisition of Financial Assets and Net U.S.
Incurrence of Liabilities
[Millions of dollars, seasonally adjusted]

                                                   2017
                                       II (r)    III (r)   IV (r)

Net U.S. acquisition of                315,922   373,591   127,135
financial assets excluding
financial derivatives (net
increase in assets / financial
outflow (+))
Direct investment assets                49,976   102,936    91,256
  Equity                                92,569    69,079   101,537
    Equity other than                   13,047     3,850      -472
    reinvestment of earnings
    Reinvestment of earnings            79,521    65,229   102,009
  Debt instruments                     -42,593    33,857   -10,281
Portfolio investment assets            180,700   175,910    88,301
  Equity and investment fund shares    110,542    63,399   -39,233
  Debt securities                       70,158   112,512   127,534
    Short-term securities               38,799    74,149    40,467
    Long-term corporate securities      21,717    26,957    62,231
    Other long-term securities           9,642    11,406    24,836
Other investment assets                 85,095    94,804   -50,883
  Currency and deposits                 25,883    78,488     4,850
  Loans                                 59,564    15,099   -55,760
  Trade credit and advances               -352     1,217        26
Reserve assets                             150       -61    -1,539
  Monetary gold                              0         0         0
  Special drawing rights                    15        26        26
  Reserve position in the                   82       -98    -1,535
  International Monetary Fund
  Other reserve assets                      54        11       -29
Net U.S. incurrence of                 445,338   504,082   159,164
liabilities excluding financial
derivatives (net increase
in liabilities / financial
inflow (+))
Direct investment liabilities           97,118   107,107    38,250
  Equity                                77,022    72,927    64,320
    Equity other than                   52,806    42,799    36,488
    reinvestment of earnings
    Reinvestment of earnings            24,215    30,127    27,832
  Debt instruments                      20,097    34,180   -26,070
Portfolio investment liabilities       263,170   294,275    81,626
  Equity and investment                 21,024    80,561    -3,377
  fund shares
  Debt securities                      242,147   213,713    85,003
    Short term                          15,264   -20,035    25,215
      Treasury bills and                 3,820     9,132    20,270
      certificates
      Federally sponsored agency        -4,592    -1,927     2,160
      securities
      Other short-term securities       16,036   -27,240     2,785
    Long term                          226,882   233,748    59,788
      Treasury bonds and notes          51,155   150,035       546
      Federally sponsored agency        21,605    14,153     8,523
      securities
      Corporate bonds and notes        148,860    70,281    51,058
      Other                              5,262      -721      -339
Other investment liabilities            85,050   102,701    39,288
  Currency (short term)                 15,830    15,850    17,262
  Deposits                              94,915   -31,642    44,161
  Loans                                -25,350   112,549   -23,436
  Trade credit and advances               -346     5,943     1,302
  Special drawing rights                     0         0         0
  allocations

                                      2018       Change
                                                 2017:IV
                                                 to 2018:I
                                      I (p)

Net U.S. acquisition of                254,728    127,593
financial assets excluding
financial derivatives (net
increase in assets / financial
outflow (+))
Direct investment assets              -119,662   -210,918
  Equity                              -170,162   -271,699
    Equity other than                    4,859      5,331
    reinvestment of earnings
    Reinvestment of earnings          -175,022   -277,031
  Debt instruments                      50,500     60,781
Portfolio investment assets            365,467    277,166
  Equity and investment fund shares    242,518    281,751
  Debt securities                      122,949     -4,585
    Short-term securities               21,945    -18,522
    Long-term corporate securities      72,160      9,929
    Other long-term securities          28,844      4,008
Other investment assets                  8,930     59,813
  Currency and deposits                -22,575    -27,425
  Loans                                 33,191     88,951
  Trade credit and advances             -1,686     -1,712
Reserve assets                              -7      1,532
  Monetary gold                              0          0
  Special drawing rights                    33          7
  Reserve position in the                  -73      1,462
  International Monetary Fund
  Other reserve assets                      34         63
Net U.S. incurrence of                 464,054    304,890
liabilities excluding financial
derivatives (net increase
in liabilities / financial
inflow (+))
Direct investment liabilities           97,344     59,094
  Equity                                62,395     -1,925
    Equity other than                   26,165    -10,323
    reinvestment of earnings
    Reinvestment of earnings            36,229      8,397
  Debt instruments                      34,949     61,019
Portfolio investment liabilities       292,084    210,458
  Equity and investment                150,345    153,722
  fund shares
  Debt securities                      141,739     56,736
    Short term                          31,354      6,139
      Treasury bills and                13,560     -6,710
      certificates
      Federally sponsored agency         2,214         54
      securities
      Other short-term securities       15,580     12,795
    Long term                          110,385     50,597
      Treasury bonds and notes          76,491     75,945
      Federally sponsored agency        28,912     20,389
      securities
      Corporate bonds and notes          4,731    -46,327
      Other                                251        590
Other investment liabilities            74,626     35,338
  Currency (short term)                 16,970       -292
  Deposits                             -18,689    -62,850
  Loans                                 67,255     90,691
  Trade credit and advances              9,090      7,788
  Special drawing rights                     0          0
  allocations

(p) Preliminary
(r) Revised
Note. The statistics are presented in table 1.2, table 6.1, table 7.1,
and table 8.1 on BEA's website.

Incurrence of liabilities

* Net U.S. incurrence of portfolio investment liabilities increased $210.5 billion to $292.1 billion, mostly reflecting net foreign purchases of U.S. equity and investment fund shares following net foreign sales in the fourth quarter.

* Net U.S. incurrence of direct investment liabilities increased $59.1 billion to $97.3 billion, mostly reflecting net U.S. incurrence of debt liabilities following net repayment in the fourth quarter.

* Net U.S. incurrence of other investment liabilities increased $35.3 billion to $74.6 billion, reflecting partly offsetting changes in transactions in loan and deposit liabilities. Net U.S. incurrence of loan liabilities in the first quarter followed net repayment in the fourth quarter. Net foreign withdrawal of deposits in the United States followed net incurrence in the fourth quarter.

Effects of the 2017 Tax Cuts and Jobs Act on Components of Direct Investment

In the international transactions accounts, income on equity, or earnings, of foreign affiliates of U.S. multinational enterprises consist of repatriated earnings to the parent company in the United States in the form of dividends and reinvested earnings in foreign affiliates. When dividends exceed earnings in a given period, there is a net withdrawal of equity assets. In the first quarter of 2018, direct investment earnings were $130.6 billion, reflecting dividends and withdrawals of $305.6 billion and reinvested earnings of -$175.0 billion (chart 7).

The large magnitudes for dividends and withdrawals and the negative reinvested earnings reflect the repatriation of accumulated earnings by foreign affiliates of U.S. multinational enterprises to their parent companies in the United States in response to the 2017 Tax Cuts and Jobs Act (TCJA). The TCJA requires U.S. parent companies to pay a one-time tax on their accumulated earnings held abroad but generally eliminates taxes on repatriated earnings. The negative reinvested earnings of --$175.0 billion reflect the fact that dividends exceeded earnings in the first quarter and U.S parent companies withdrew accumulated prior earnings from their foreign affiliates. The negative reinvested earnings are also reflected in the net acquisition of direct investment assets in the financial account, which was -$119.7 billion in the first quarter of 2018 (table D).

For more information, see "How does the 2017 Tax Cuts and lobs Act affect BEA's business income statistics?" and "How are the international transactions accounts affected by an increase in direct investment dividend receipts?"

Updates to Statistics

The U.S. international transactions statistics for the first quarter of 2010 through the fourth quarter of 2017 have been updated to incorporate newly available and revised source data, updated seasonal factors, and improved estimation methodologies (table E).

Table E. Updates to the Fourth Quarter 2017 International Transactions
Aggregates
[Millions of dollars, seasonally adjusted]

                                      Preliminary             Revised
                                      estimates               estimates

Balance on goods                      -214,261                -212,378
Balance on services                     60,375                  64,551
Balance on primary income               57,195                  62,371
Balance on secondary                   -31,467                 -30,692
income (current transfers)
Balance on current account            -128,158                -116,148
Net U.S. acquisition of                177,861                 127,135
financial assets
Net U.S. incurrence of                 208,437                 159,164
liabilities
Net lending or borrowing               -29,799                 -31,252
from financial-account transactions

For more information, see Barbara Berman and Erin (Yiran) Xin, "Annual Update of the U.S. International Transactions Accounts" in this issue of the Survey of Current Business.

Prepared by Michelle Murillo