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NEWS RELEASE EMBARGOED UNTIL RELEASE AT 8:30 A.M. EST, TUESDAY, December 30, 2014 Christopher A. Gohrband: (202) 606-9564 BEA 14-67 Elena L. Nguyen: (202) 606-9555 Doug Weinberg: (202) 606-9590 (For inquiries regarding direct investment) U.S. Net International Investment Position: End of Third Quarter 2014 The U.S. net international investment position at the end of the third quarter of 2014 was -$6,157.9 billion (preliminary) as the value of U.S. liabilities exceeded the value of U.S. assets (chart 1, table 1). At the end of the second quarter of 2014, the net position was -$5,475.4 billion (revised). The $682.5 billion decrease in the net position reflected a $362.4 billion decrease in the value of U.S. assets and a $320.2 billion increase in the value of U.S. liabilities. The U.S. net international investment position decreased 12.5 percent in the third quarter, compared with an increase of 0.7 percent in the second quarter and an average quarterly decrease of 7.0 percent from the first quarter of 2011 through the first quarter of 2014. The net position was equal to 3.1 percent of the value of all U.S. financial assets at the end of the third quarter, up from 2.8 percent at the end of the second quarter. 1 Chart 2. U.S. Assets and Liabilities, 2006:IV-2014:III (Quarterly, not seasonally adjusted) Chart 1. U.S. Net International Investment Position, 2006:IV-2014:III (Quarterly, not seasonally adjusted) Billions of dollars 35,000 Billions of dollars 0 -500 -1,000 30,000 -1,500 -2,000 -2,500 2006:IV U.S. liabilities 25,000 -3,000 -3,500 -4,000 20,000 -4,500 U.S. assets -5,000 -5,500 15,000 2006:IV -6,000 -6,500 -7,000 10,000 2007 2008 2009 2010 2011 2012 2013 2014 2007 2008 2009 2010 2011 2012 2013 2014 1 Board of Governors of the Federal Reserve System (FRS), “Table L.5 Total Liabilities and Its Relation to Total Financial Assets,” in Financial Accounts of the United States, Third Quarter 2014, Z.1. Statistical Release (Washington, DC: FRS, December 11, 2014): 11. According to the December release, at the end of the third quarter, the value of all U.S. financial assets was $198,456.4 billion. The value of U.S. assets abroad was $24,614.6 billion, or 12.4 percent of all U.S. assets, down from 12.6 percent at the end of the second quarter and down from the 14.1 percent series peak at the end of the first quarter of 2008. __________________ NOTE: This news release is available on BEA’s Web site <www.bea.gov> along with Highlights related to this release, the latest detailed statistics for the U.S. international investment position, and a description of the estimation methods used to compile them. The third-quarter statistics in this release are preliminary and will be revised on March 31, 2015. -more- -2U.S. assets were $24,614.6 billion at the end of the third quarter compared with $24,977.0 billion at the end of the second quarter (chart 2). The $362.4 billion decrease reflected a $474.3 billion decrease in the value of assets excluding financial derivatives and a $112.0 billion increase in the value of financial derivatives. U.S. assets excluding financial derivatives were $21,816.4 billion at the end of the third quarter compared with $22,290.7 billion at the end of the second quarter. The $474.3 billion decrease reflected an $841.2 billion decrease resulting from other changes in position that was partly offset by a $366.9 billion increase resulting from financial transactions. 2 Other changes in position were mostly attributable to the depreciation of major foreign currencies against the U.S. dollar that lowered the value of U.S assets in dollar terms. 3 U.S. liabilities were $30,772.5 billion at the end of the third quarter compared with $30,452.3 billion at the end of the second quarter (chart 2). The $320.2 billion increase reflected a $227.9 billion increase in the value of liabilities excluding financial derivatives and a $92.3 billion increase in the value of financial derivatives. U.S. liabilities excluding financial derivatives were $28,028.5 billion at the end of the third quarter compared with $27,800.6 billion at the end of the second quarter. The $227.9 billion increase reflected a $358.0 billion increase resulting from financial transactions that was partly offset by a $130.1 billion decrease resulting from other changes in position. Other changes in position were mostly attributable to a decrease in the value of U.S. liabilities that were denominated in foreign currencies as a result of depreciation of major foreign currencies against the U.S. dollar, and to a lesser extent, decreases in U.S. bond prices. Revisions The U.S. net international investment position at the end of the second quarter of 2014 was revised to -$5,475.4 billion from the previously-published value of -$5,445.1 billion. The $30.3 billion downward revision to the net position reflected a $73.9 billion upward revision to U.S. liabilities that exceeded a $43.7 billion upward revision to U.S. assets. U.S. assets at the end of the second quarter were revised to $24,977.0 billion from $24,933.3 billion; U.S. liabilities were revised to $30,452.3 billion from $30,378.4 billion. These revisions reflect revised source data from the Treasury International Capital (TIC) reporting system and from BEA’s quarterly surveys of direct investment. 2 For statistics on financial transactions, see the financial account in table 1.2 of the U.S. International Transactions Accounts. Quarterly financial transactions presented in this release are not seasonally adjusted. Detail on other changes in position such as price changes, exchange-rate changes, and other changes in volume and valuation is presented only for annual statistics. 3 According to the Federal Reserve Board’s major currencies index, foreign currencies depreciated 7 percent against the U.S. dollar from the end of the second quarter to the end of the third quarter. The major currencies index is a weighted average of the foreign exchange values of the U.S. dollar against a subset of the broad index currencies that circulate widely outside the country of issue. See Foreign Exchange Rates—H10 (weekly release of daily data), Nominal Major Currencies Index at www.federalreserve.gov. -more- -3- * * * Release dates in 2015: End of the Fourth Quarter and Year 2014..........................................March 31, 2015 (Tuesday) End of the First Quarter of 2015, Year 2014, and Annual Revisions…June 30, 2015 (Tuesday) End of the Second Quarter of 2015..............................................September 29, 2015 (Tuesday) End of the Third Quarter of 2015.................................................December 29, 2015 (Tuesday) * * * BEA’s national, international, regional, and industry statistics; the Survey of Current Business; and BEA news releases are available without charge at www.bea.gov. At the site, you can also subscribe to receive free e-mail summaries of BEA releases and announcements. -more- -4Table 1. U.S. Net International Investment Position at the End of the Period [Millions of dollars, not seasonally adjusted] Line 2013 Type of investment I II Change: 2014:II to 2014:III 2014 III IV I II r III p 1 U.S. net international investment position (line 4 less line 35)....................................... -5,110,866 -5,523,614 -4,994,895 -5,382,996 -5,511,678 -5,475,364 -6,157,895 -682,531 2 Net international investment position excluding financial derivatives (line 5 less line 36).... -5,150,891 -5,582,966 -5,042,858 -5,456,542 -5,581,501 -5,509,876 -6,212,109 -702,233 3 Financial derivatives other than reserves, net (line 6 less line 37)....................................... 40,025 59,352 47,963 73,546 69,823 34,512 54,214 19,702 4 U.S. assets............................................................................................................................ 22,650,385 21,904,000 22,954,418 23,709,843 24,020,053 24,976,981 24,614,629 -362,352 5 Assets excluding financial derivatives (sum of lines 7, 10, 21, and 26)............................. 19,402,008 19,078,933 20,193,002 20,890,008 21,365,676 22,290,695 21,816,373 -474,322 6 Financial derivatives other than reserves, gross positive fair value (line 15)..................... 3,248,377 2,825,067 2,761,416 2,819,835 2,654,377 2,686,286 2,798,256 111,970 By functional category: 7 Direct investment at market value...................................................................................... 6,185,179 6,146,656 6,690,152 7,080,058 7,117,452 7,488,612 7,235,389 -253,223 8 Equity................................................................................................................................ 5,237,927 5,162,185 5,699,007 6,070,002 6,135,437 6,428,797 6,170,296 -258,501 9 Debt instruments.............................................................................................................. 947,252 984,471 991,145 1,010,056 982,015 1,059,815 1,065,093 5,278 10 Portfolio investment............................................................................................................ 8,230,586 8,146,302 8,721,240 9,183,060 9,387,778 9,981,018 9,691,701 -289,317 11 Equity and investment fund shares.................................................................................. 5,524,329 5,508,752 6,037,266 6,444,232 6,593,895 7,027,230 6,768,553 -258,677 12 Debt securities.................................................................................................................. 2,706,257 2,637,550 2,683,974 2,738,828 2,793,883 2,953,788 2,923,148 -30,640 13 Short term....................................................................................................................... 431,424 451,835 458,953 446,710 437,064 483,366 474,640 -8,726 14 Long term........................................................................................................................ 2,274,833 2,185,715 2,225,021 2,292,118 2,356,820 2,470,422 2,448,507 -21,915 15 Financial derivatives other than reserves, gross positive fair value................................... 3,248,377 2,825,067 2,761,416 2,819,835 2,654,377 2,686,286 2,798,256 111,970 16 Over-the-counter contracts.............................................................................................. 3,212,569 2,778,730 2,718,224 2,783,047 2,618,573 2,651,879 2,754,529 102,650 17 Single-currency interest rate contracts.......................................................................... 2,616,516 2,205,507 2,171,063 2,207,692 2,074,456 2,170,053 2,103,877 -66,176 18 Foreign exchange contracts........................................................................................... 276,419 268,643 258,064 291,934 271,566 229,408 412,123 182,715 19 Other contracts............................................................................................................... 319,634 304,580 289,097 283,421 272,551 252,418 238,529 -13,889 20 Exchange-traded contracts.............................................................................................. 35,808 46,337 43,192 36,788 35,804 34,407 43,727 9,320 21 Other investment................................................................................................................ 4,433,184 4,339,768 4,298,183 4,178,557 4,389,562 4,343,200 4,445,297 102,097 22 Currency and deposits..................................................................................................... 2,056,381 2,021,105 1,977,487 1,972,149 1,949,267 1,921,206 1,941,724 20,518 23 Loans................................................................................................................................ 2,321,889 2,259,549 2,276,647 2,161,123 2,401,733 2,382,089 2,462,309 80,220 24 Insurance technical reserves........................................................................................... n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 25 Trade credit and advances............................................................................................... 54,915 59,115 44,049 45,286 38,562 39,905 41,264 1,359 26 Reserve assets.................................................................................................................. 553,058 446,207 483,426 448,333 470,884 477,865 443,987 -33,878 27 Monetary gold.................................................................................................................... 417,941 311,707 346,878 314,975 337,791 343,871 318,113 -25,758 28 Special drawing rights...................................................................................................... 53,704 53,881 54,966 55,184 55,394 55,411 53,148 -2,263 29 Reserve position in the International Monetary Fund........................................................ 34,039 33,860 33,462 30,750 29,820 30,535 28,358 -2,177 30 Other reserve assets........................................................................................................ 47,374 46,759 48,120 47,424 47,879 48,048 44,368 -3,680 31 Currency and deposits................................................................................................... 23,039 21,351 21,575 20,889 20,930 24,777 22,143 -2,634 32 Securities........................................................................................................................ 22,152 21,570 22,078 21,436 21,727 21,866 22,225 359 33 Financial derivatives....................................................................................................... ..... ..... ..... ..... ..... ..... ..... ..... 34 Other claims................................................................................................................... 2,183 3,838 4,467 5,099 5,222 1,405 0 -1,405 35 U.S. liabilities........................................................................................................................ 27,761,250 27,427,614 27,949,313 29,092,840 29,531,731 30,452,345 30,772,525 320,180 36 Liabilities excluding financial derivatives (sum of lines 38, 41, and 56)............................. 24,552,898 24,661,899 25,235,860 26,346,551 26,947,177 27,800,571 28,028,483 227,912 37 Financial derivatives other than reserves, gross negative fair value (line 50).................... 3,208,352 2,765,715 2,713,453 2,746,289 2,584,554 2,651,774 2,744,042 92,268 By functional category: 38 Direct investment at market value...................................................................................... 5,018,930 5,131,714 5,342,443 5,790,551 5,688,887 5,999,708 6,044,171 44,463 39 Equity................................................................................................................................ 3,753,276 3,845,433 4,041,326 4,461,978 4,387,205 4,623,555 4,669,125 45,570 40 Debt instruments.............................................................................................................. 1,265,654 1,286,281 1,301,117 1,328,573 1,301,682 1,376,153 1,375,046 -1,107 41 Portfolio investment............................................................................................................ 14,569,596 14,432,860 14,882,136 15,503,192 15,904,348 16,310,118 16,478,914 168,796 42 Equity and investment fund shares.................................................................................. 5,000,428 5,076,621 5,376,543 5,821,487 5,993,925 6,253,926 6,350,547 96,621 43 Debt securities.................................................................................................................. 9,569,168 9,356,239 9,505,593 9,681,705 9,910,423 10,056,192 10,128,367 72,175 44 Short term....................................................................................................................... 914,503 882,452 829,577 892,655 904,771 877,460 870,787 -6,673 45 Treasury bills and certificates....................................................................................... 720,235 675,367 645,114 686,036 689,327 626,830 614,053 -12,777 46 Other short-term securities.......................................................................................... 194,268 207,085 184,463 206,619 215,444 250,630 256,734 6,104 47 Long term........................................................................................................................ 8,654,665 8,473,787 8,676,016 8,789,050 9,005,652 9,178,732 9,257,580 78,848 48 Treasury bonds and notes............................................................................................ 5,001,076 4,919,659 5,009,541 5,108,856 5,262,471 5,385,706 5,454,276 68,570 49 Other long-term securities............................................................................................ 3,653,589 3,554,128 3,666,475 3,680,194 3,743,181 3,793,026 3,803,304 10,278 50 Financial derivatives other than reserves, gross negative fair value.................................. 3,208,352 2,765,715 2,713,453 2,746,289 2,584,554 2,651,774 2,744,042 92,268 51 Over-the-counter contracts.............................................................................................. 3,173,044 2,717,685 2,667,187 2,709,746 2,551,372 2,618,113 2,700,422 82,309 52 Single-currency interest rate contracts.......................................................................... 2,563,709 2,152,279 2,114,023 2,142,859 2,013,740 2,110,959 2,049,195 -61,764 53 Foreign exchange contracts........................................................................................... 300,138 272,150 270,744 290,790 270,895 256,358 414,990 158,632 54 Other contracts............................................................................................................... 309,197 293,256 282,420 276,097 266,737 250,796 236,237 -14,559 55 Exchange-traded contracts.............................................................................................. 35,308 48,030 46,266 36,543 33,182 33,661 43,620 9,959 56 Other investment................................................................................................................ 4,964,372 5,097,325 5,011,281 5,052,808 5,353,942 5,490,745 5,505,398 14,653 57 Currency and deposits..................................................................................................... 2,598,915 2,702,344 2,677,595 2,758,129 2,681,963 2,787,408 2,826,043 38,635 58 Loans................................................................................................................................ 2,168,736 2,193,088 2,138,770 2,095,860 2,457,106 2,485,327 2,466,017 -19,310 59 Insurance technical reserves........................................................................................... n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 60 Trade credit and advances............................................................................................... 143,776 148,780 140,739 144,433 160,288 163,416 160,980 -2,436 61 Special drawing rights allocations.................................................................................... 52,945 53,113 54,177 54,386 54,585 54,594 52,358 -2,236 p Preliminary r Revised n.a. Not available ..... Not applicable Note: Details may not add to totals because of rounding. Source: U. S. Bureau of Economic Analysis