International Financial Law Prof Blog

Editor: William Byrnes
Texas A&M University
School of Law

Thursday, August 9, 2018

U.S. International Trade in Goods and Services June 2018

he U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced today that the goods 
and services deficit was $46.3 billion in June, up $3.2 billion from $43.2 billion in May, revised.

Goods and Services Trade Deficit

Exports, Imports, and Balance (exhibit 1)

June exports were $213.8 billion, $1.5 billion less than May exports. June imports were $260.2 
billion, $1.6 billion more than May imports.

The June increase in the goods and services deficit reflected an increase in the goods deficit 
of $3.1 billion to $68.8 billion and a decrease in the services surplus of less than $0.1 billion 
to $22.5 billion.

Year-to-date, the goods and services deficit increased $19.6 billion, or 7.2 percent, from the 
same period in 2017. Exports increased $103.6 billion or 9.0 percent. Imports increased $123.2 
billion or 8.6 percent.

Three-Month Moving Averages (exhibit 2)

The average goods and services deficit decreased $0.3 billion to $45.2 billion for the three 
months ending in June.
     * Average exports increased $1.0 billion to $213.5 billion in June.
     * Average imports increased $0.8 billion to $258.7 billion in June.

Year-over-year, the average goods and services deficit decreased $0.4 billion from the three 
months ending in June 2017.
     * Average exports increased $20.2 billion from June 2017.
     * Average imports increased $19.9 billion from June 2017.

Exports (exhibits 3, 6, and 7)

Exports of goods decreased $1.7 billion to $143.2 billion in June.
  Exports of goods on a Census basis decreased $1.7 billion.
     * Consumer goods decreased $1.4 billion.
          o Pharmaceutical preparations decreased $0.6 billion.
          o Jewelry decreased $0.4 billion.
     * Capital goods decreased $0.9 billion.
          o Civilian aircraft engines decreased $0.4 billion.
          o Civilian aircraft decreased $0.2 billion.
     * Automotive vehicles, parts, and engines decreased $0.7 billion.
          o Passenger cars decreased $0.9 billion.
     * Industrial supplies and materials increased $2.0 billion.
          o Other petroleum products increased $0.5 billion.
          o Nonmonetary gold increased $0.5 billion.
          o Fuel oil increased $0.5 billion.

  Net balance of payments adjustments increased less than $0.1 billion.

Exports of services increased $0.2 billion to $70.6 billion in June.
     * Financial services increased $0.1 billion. 

Imports (exhibits 4, 6, and 8)

Imports of goods increased $1.4 billion to $212.0 billion in June.
  Imports of goods on a Census basis increased $1.5 billion.
     * Consumer goods increased $2.0 billion.
          o Pharmaceutical preparations increased $1.5 billion.
     * Industrial supplies and materials increased $0.9 billion.
          o Crude oil increased $1.2 billion.
     * Capital goods decreased $1.5 billion.
          o Computers decreased $0.8 billion.
          o Telecommunications equipment decreased $0.5 billion.

  Net balance of payments adjustments decreased $0.1 billion.

Imports of services increased $0.2 billion to $48.1 billion in June.
     * Charges for the use of intellectual property increased $0.3 billion. The increase reflects 
       payments for the rights to broadcast the portion of the 2018 soccer World Cup that occurred 
       in June.

Real Goods in 2012 Dollars – Census Basis (exhibit 11)

The real goods deficit increased $3.8 billion to $79.3 billion in June.
     * Real exports of goods decreased $2.1 billion to $151.1 billion.
     * Real imports of goods increased $1.7 billion to $230.4 billion.

Revisions

Revisions to May exports
     * Exports of goods were revised up less than $0.1 billion.
     * Exports of services were revised down less than $0.1 billion.

Revisions to May imports
     * Imports of goods were revised down less than $0.1 billion.
     * Imports of services were revised up $0.2 billion.

Goods by Selected Countries and Areas: Monthly – Census Basis (exhibit 19)

The June figures show surpluses, in billions of dollars, with South and Central America ($3.3), 
Hong Kong ($2.5), Brazil ($0.8), United Kingdom ($0.4), and Singapore (less than $0.1). Deficits 
were recorded, in billions of dollars, with China ($32.5), European Union ($12.8), Mexico ($6.7), 
Germany ($5.7), Japan ($5.6), Canada ($2.6), Italy ($2.2), OPEC ($1.8), India ($1.7), Taiwan ($1.4), 
South Korea ($1.3), Saudi Arabia ($0.8), and France ($0.7).

     * The deficit with members of OPEC increased $1.6 billion to $1.8 billion in June. Exports 
       decreased $0.8 billion to $5.0 billion and imports increased $0.7 billion to $6.7 billion.
     * The deficit with the European Union increased $0.9 billion to $12.8 billion in June. Exports 
       decreased $0.3 billion to $27.2 billion and imports increased $0.6 billion to $40.0 billion.
     * The deficit with Japan decreased $0.4 billion to $5.6 billion in June. Exports decreased 
       $0.2 billion to $6.1 billion and imports decreased $0.7 billion to $11.7 billion.

August 9, 2018 in Economics | Permalink | Comments (0)

Sunday, August 5, 2018

Direct Investment by Country and Industry: 2017

Direct Investment by Country and Industry: 2017

The U.S. direct investment abroad position, or cumulative level of investment, increased $427.3 billion to $6,013.3 billion at the end of 2017 from $5,586.0 billion at the end of 2016, according to statistics released by the Bureau of Economic Analysis (BEA). The increase mainly reflected a $243.6 billion increase in the position in Europe, primarily in Switzerland, the United Kingdom, Ireland, and the Netherlands. By industry, affiliates in manufacturing and holding companies accounted for the largest increases.

The foreign direct investment in the United States position increased $260.4 billion to $4,025.5 billion at the end of 2017 from $3,765.1 billion at the end of 2016. The increase mainly reflected a $128.2 billion increase in the position from Europe, primarily Ireland, Switzerland, and the Netherlands. By industry, affiliates in manufacturing and wholesale trade accounted for the largest increases.

Direct Investment Positions, 2016-2017

The increase in the U.S. direct investment position abroad in 2017 mainly reflected financial transactions of $300.4 billion, primarily reinvestment of earnings. The increase in the foreign direct investment position in the United States in 2017 mainly reflected financial transactions of $277.3 billion, primarily equity investment other than reinvestment of earnings.

U.S. direct investment abroad (tables 1 – 4)

U.S. multinational enterprises (MNEs) invest in nearly every country, but their investment in foreign affiliates in five countries accounted for more than half of the total position at the end of 2017. The U.S. direct investment abroad position was largest in the Netherlands at $936.7 billion, followed by the United Kingdom ($747.6 billion), Luxembourg ($676.4 billion), Ireland ($446.4 billion), and Canada ($391.2 billion).

By industry of the immediate foreign affiliate, investment was highly concentrated in holding companies, which accounted for nearly half of the position in 2017. By industry of the U.S. parent, investment by manufacturing MNEs accounted for 55.6 percent of the position, followed by MNEs in finance and insurance (12.4 percent).

U.S. MNEs earned income of $470.9 billion on their investment abroad in 2017.

Foreign direct investment in the United States (tables 5 – 8)

By country of the immediate foreign parent, five countries accounted for more than half of the total position at the end of 2017. The United Kingdom was the top investing country with a position of $540.9 billion, followed by Japan ($469.0 billion), Canada ($453.1 billion), Luxembourg ($410.7 billion), and the Netherlands ($367.1 billion).

By country of the ultimate beneficial owner (UBO), the top five countries in terms of position were the United Kingdom ($614.9 billion), Canada ($523.8 billion), Japan ($476.9 billion), Germany ($405.6 billion), and Ireland ($328.7 billion). On this basis, investment from the Netherlands and Luxembourg was much lower than by country of foreign parent, indicating that much of the investment from these countries was ultimately owned by investors in other countries.

Foreign direct investment in the United States was concentrated in the U.S. manufacturing sector, which accounted for 39.9 percent of the position. There was also sizable investment in finance and insurance (13.4 percent).

Foreign MNEs earned income of $173.8 billion on their investment in the United States in 2017.

August 5, 2018 in Economics | Permalink | Comments (0)

Saturday, August 4, 2018

National Income and Product Accounts Gross Domestic Product: Second Quarter 2018 (Advance Estimate), and Comprehensive Update

Real gross domestic product increased at an annual rate of 4.1 percent in the second quarter of 2018
(table 1), according to the "advance" estimate released by the Bureau of Economic Analysis. In the first
quarter, real GDP increased 2.2 percent (revised).

The Bureau emphasized that the second-quarter advance estimate released today is based on source
data that are incomplete or subject to further revision by the source agency (see "Source Data for the
Advance Estimate" on page 2). The "second" estimate for the second quarter, based on more complete
data, will be released on August 29, 2018.

The increase in real GDP in the second quarter reflected positive contributions from personal
consumption expenditures (PCE), exports, nonresidential fixed investment, federal government
spending, and state and local government spending that were partly offset by negative contributions
from private inventory investment and residential fixed investment. Imports, which are a subtraction in
the calculation of GDP, increased (table 2).
 
Real GDP: Percent Change from Preceding Quarter
BOX._______

                Comprehensive Update of the National Income and Product Accounts

The estimates released today also reflect the results of the 15th comprehensive update of the National
Income and Product Accounts (NIPAs). The updated estimates reflect previously announced improvements,
and include the introduction of new not seasonally adjusted estimates for GDP, GDI, and their major
components. For more information, see the Technical Note. Revised NIPA table stubs, initial results, and
background materials are available on the BEA Web site.

END BOX.______

The acceleration in real GDP growth in the second quarter reflected accelerations in PCE and in exports,
a smaller decrease in residential fixed investment, and accelerations in federal government spending
and in state and local spending. These movements were partly offset by a downturn in private inventory
investment and a deceleration in nonresidential fixed investment. Imports decelerated.

Current-dollar GDP increased 7.4 percent, or $361.5 billion, in the second quarter to a level of $20.4
trillion. In the first quarter, current-dollar GDP increased 4.3 percent, or $209.2 billion (table 1 and table
3A).

The price index for gross domestic purchases increased 2.3 percent in the second quarter, compared
with an increase of 2.5 percent in the first quarter (table 4). The PCE price index increased 1.8 percent,
compared with an increase of 2.5 percent. Excluding food and energy prices, the PCE price index
increased 2.0 percent, compared with an increase of 2.2 percent (table 4).


Personal Income (table 8)

Current-dollar personal income increased $183.7 billion in the second quarter, compared with an
increase of $215.8 billion in the first quarter. Decelerations in wages and salaries, government social
benefits, personal interest income, and nonfarm proprietors' income were partly offset by accelerations
in personal dividend income and rental income, a deceleration in contributions for government social
insurance (a subtraction in the calculation of personal income), and an upturn in farm proprietors’
income.

Disposable personal income increased $167.5 billion, or 4.5 percent, in the second quarter, compared
with an increase of $256.7 billion, or 7.0 percent, in the first quarter. Real disposable personal income
increased 2.6 percent, compared with an increase of 4.4 percent.

Personal saving was $1,051.1 billion in the second quarter, compared with $1094.1 billion in the first
quarter. The personal saving rate -- personal saving as a percentage of disposable personal income --
was 6.8 percent in the second quarter, compared with 7.2 percent in the first quarter.

Updates for the first quarter of 2018

For the first quarter of 2018, real GDP is now estimated to have increased 2.2 percent (table 1); in the
previously published estimates, first-quarter GDP was estimated to have increased 2.0 percent. The 0.2-
percentage point upward revision to the percent change in first-quarter real GDP primarily reflected
upward revisions to private inventory investment, nonresidential fixed investment, and federal
government spending that were partly offset by downward revisions to PCE and residential fixed
investment. Imports were revised down.

Real GDI is now estimated to have increased 3.9 percent in the first quarter (table 1); in the previously
published estimates, first-quarter GDI was estimated to have increased 3.6 percent.

First Quarter 2018

Previous Estimate Revised
(Percent change from preceding quarter)
Real GDP 2.0 2.2
Current-dollar GDP 4.2 4.3
Real GDI 3.6 3.9
Average of Real GDP and GDI 2.8 3.1
Gross domestic purchases price index 2.7 2.5
PCE price index 2.5 2.5

 

Summary of historical updates

The picture of the economy presented in the updated estimates is very similar to the picture presented
in the previously published estimates.

* For 1929–2012, the average annual growth rate of real GDP was 3.2 percent, unrevised from the
previously published estimates. For the more recent period, 2007–2017, the growth rate was
1.5 percent, 0.1 percentage point higher than in the previously published estimates.

* For 2012–2017, the average annual growth rate of real GDP was 2.2 percent, the same as in the
previously published estimates. The percent change in real GDP was unrevised for 2012; revised
up 0.1 percentage point for 2013; revised down 0.1 percentage point for 2014; unrevised for
2015; revised up 0.1 percentage point for 2016; and revised down 0.1 percentage point for
2017.

* For 2012–2017, the average rate of change in the prices paid by U.S. residents, as measured by
the gross domestic purchasers’ price index, was 1.2 percent, 0.1 percentage point lower than in
the previously published estimates.

* For the period of contraction from the fourth quarter of 2007 to the second quarter of 2009,
real GDP decreased at an average annual rate of 2.7 percent; in the previously published
estimates, it decreased 2.8 percent.

* For the period of expansion from the second quarter of 2009 to the first quarter of 2018, real
GDP increased at an average annual rate of 2.2 percent, the same as previously published.

 

Real GDP (Table 1A)

The updated statistics largely reflect the incorporation of newly available and revised source data (see
the box below) and improvements to existing methodologies.

*	From 2012 to 2017, real GDP increased at an average annual rate of 2.2 percent, the same as
previously published. From the fourth quarter of 2012 to the first quarter of 2018, real GDP
increased at an average annual rate of 2.3 percent, the same as in the previously published
estimates.

Real GDP: Percent Change from Preceding Quarter
o	For 2012, real GDP growth was unrevised. Upward revisions to nonresidential fixed
investment and inventory investment were offset by an upward revision to imports and
by a downward revision to state and local government spending.

o	For 2013, real GDP growth was revised up 0.1 percentage point. Upward revisions to
nonresidential fixed investment, state and local government spending, inventory
investment, and federal government spending were partly offset by an upward revision
to imports.

o	For 2014, real GDP growth was revised down 0.1 percentage point. An upward revision
to imports and downward revisions to inventory investment and state and local
government spending were partly offset by upward revisions to nonresidential fixed
investment.

o	For 2015, real GDP growth was unrevised. Upward revisions to state and local
government spending, personal consumption expenditures (PCE), exports, and
inventory investment were offset by an upward revision to imports and by a downward
revision to nonresidential fixed investment.

o	For 2016, real GDP growth was revised up 0.1 percentage point. Upward revisions to
nonresidential fixed investment, state and local government spending, residential
investment, exports, and federal government spending were partly offset by a
downward revision to inventory investment and by an upward revision to imports.

o	For 2017, real GDP growth was revised down 0.1 percentage point. A downward
revision to PCE, an upward revision to imports, and downward revisions to state and
local government spending and exports were partly offset by upward revisions to
inventory investment, nonresidential fixed investment, residential investment, and
federal government spending.

*	From the first quarter of 2012 through the fourth quarter of 2017, the average revision (without
regard to sign) in the percent change in real GDP was 0.4 percentage point. The revisions did not
change the direction of the change in real GDP (increase or decrease) for any of these quarters.

*	Current-dollar GDP was revised up for all years from 2012 to 2017: by $41.8 billion, or 0.3
percent, for 2012; $93.3 billion, or 0.6 percent, for 2013; $94.1 billion, or 0.5 percent, for 2014,
$98.6 billion, or 0.5 percent, for 2015, $82.7 billion, or 0.4 percent, for 2016, and $94.8 billion,
or 0.5 percent, for 2017.


Gross domestic income (GDI) and the statistical discrepancy (Table 1A)

*	From 2012 to 2017, real GDI increased at an average annual rate of 2.0 percent, unrevised from
the previous estimate. From the fourth quarter of 2012 to the fourth quarter of 2017, real GDI
increased at an average annual rate of 2.1 percent; in the previously published estimates, real
GDI increased at an average annual rate of 2.0 percent.

*	The statistical discrepancy as a percentage of GDP was revised from -1.3 percent to -1.5 percent
for 2012; was revised from -0.8 percent to -1.0 percent for 2013; was revised from -1.3 percent
to -1.7 percent for 2014; was unrevised at -1.4 percent for 2015; was revised from -0.8 percent
to -0.7 percent for 2016; and was revised from -0.2 percent to -0.7 percent for 2017.

*	The average of GDP and GDI is a supplemental measure of U.S. economic activity. In real, or
inflation-adjusted, terms this measure increased at an average annual rate of 2.1 percent from
2012 to 2017, the same as previously published.


Price measures (Table 4)

*	Gross domestic purchases - From the fourth quarter of 2012 to the fourth quarter of 2017, the
average annual rate of increase in the price index for gross domestic purchases was 1.2 percent,
0.1 percentage point lower than the previously published estimates.

*	Personal consumption expenditures - From the fourth quarter of 2012 to the fourth quarter of
2017, the average annual rate of increase in the price index for PCE was 1.2 percent, the same
as previously published. The increase in the “core” PCE price index, which excludes food and
energy, was 1.6 percent, 0.1 percentage point higher than previously published.


Income and saving measures (Table 1A)

*	National income was revised up $32.8 billion, or 0.2 percent, for 2012; was revised up $49.9
billion, or 0.3 percent, for 2013; was revised up $101.4 billion, or 0.7 percent, for 2014; was
revised up $43.4 billion, or 0.3 percent, for 2015; was revised up $6.9 billion, or less than 0.1
percent, for 2016; and was revised up $146.2 billion, or 0.9 percent, for 2017.

o	For 2012, an upward revision to proprietors’ income was partly offset by downward
revisions to supplements to wages and salaries and to net interest.

o	For 2013, upward revisions to proprietors’ income and to taxes on production and
imports were partly offset by downward revisions to net interest, corporate profits, and
rental income.

o	For 2014, upward revisions to proprietors’ income and to taxes on production and
imports were partly offset by downward revisions to corporate profits and net interest.

o	For 2015, upward revisions to proprietors’ income and to taxes on production and
imports were partly offset by downward revisions to corporate profits and rental
income.

o	For 2016, upward revisions to proprietors’ income and to taxes on production and
imports were partly offset by downward revisions to corporate profits, net interest,
supplements to wages and salaries and rental income.

Footnote 2. The statistical discrepancy is current dollar GDP less current dollar GDI. GDP measures
final expenditures -- the sum of consumer spending, private investment, net exports, and government
spending. GDI measures the incomes earned in the production of GDP. In concept, GDP is equal to GDI.
In practice, they differ because they are estimated using different source data and different methods.


o	For 2017, upward revisions to proprietors’ income, wages and salaries, and taxes on
production and imports were partly offset by downward revisions to corporate profits,
rental income, and net interest.

*	Corporate profits was revised down $0.8 billion, or less than 0.1 percent, for 2012; was revised
down $22.2 billion, or 1.1 percent, for 2013; was revised down $21.7 billion, or 1.0 percent, for
2014; was revised down $60.2 billion, or 2.8 percent, for 2015; was revised down $38.5 billion,
or 1.9 percent, for 2016; and revised down $65.4 billion, or 3.0 percent, for 2017.

*	Personal income was revised up $95.0 billion, or 0.7 percent, for 2012; was revised up $107.4
billion, or 0.8 percent, for 2013; was revised up $173.6 billion, or 1.2 percent, for 2014; was
revised up $166.6 billion, or 1.1 percent, for 2015;  was revised up $196.4 billion, or 1.2 percent,
for 2016; and was revised up $401.9 billion, or 2.4 percent, for 2017.

*	From 2012 to 2017, the average annual rate of growth of real disposable personal income was
revised up 0.4 percentage point from 1.8 percent to 2.2 percent.

*	The personal saving rate (personal saving as a percentage of disposable personal income) was
revised up from 7.6 percent to 8.9 percent for 2012; was revised up from 5.0 percent to 6.4
percent for 2013; was revised up from 5.7 percent to 7.3 percent for 2014; was revised up from
6.1 percent to 7.6 percent for 2016; was revised up from 4.9 percent to 6.7 percent for 2016;
and was revised up from 3.4 percent to 6.7 percent for 2017.

 
Real GDP: Percent Change from Preceding Quarter
 

August 4, 2018 in Economics | Permalink | Comments (0)

Saturday, July 14, 2018

U.S. International Trade in Goods and Services May 2018

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced that the goods
and services deficit was $43.1 billion in May, down $3.0 billion from $46.1 billion in April,
revised.

Goods and Services Trade Deficit

Exports, Imports, and Balance (exhibit 1)

May exports were $215.3 billion, $4.1 billion more than April exports. May imports were $258.4
billion, $1.1 billion more than April imports.

The May decrease in the goods and services deficit reflected a decrease in the goods deficit of
$2.6 billion to $65.8 billion and an increase in the services surplus of $0.5 billion to $22.7
billion.

Year-to-date, the goods and services deficit increased $17.9 billion, or 7.9 percent, from the
same period in 2017. Exports increased $84.5 billion or 8.8 percent. Imports increased $102.4
billion or 8.6 percent.

Three-Month Moving Averages (exhibit 2)

The average goods and services deficit decreased $4.2 billion to $45.4 billion for the three months
ending in May.
     * Average exports increased $3.1 billion to $212.4 billion in May.
     * Average imports decreased $1.1 billion to $257.9 billion in May.

Year-over-year, the average goods and services deficit increased $0.2 billion from the three months
ending in May 2017.
     * Average exports increased $19.9 billion from May 2017.
     * Average imports increased $20.1 billion from May 2017.

Exports (exhibits 3, 6, and 7)

Exports of goods increased $3.7 billion to $144.9 billion in May.
  Exports of goods on a Census basis increased $3.6 billion.
     * Capital goods increased $2.0 billion.
          o Civilian aircraft increased $1.9 billion.
     * Foods, feeds, and beverages increased $1.7 billion.
          o Soybeans increased $2.0 billion.
     * Other goods increased $0.9 billion.
     * Industrial supplies and materials decreased $1.3 billion.
          o Other petroleum products decreased $0.9 billion.

  Net balance of payments adjustments increased $0.1 billion.

Exports of services increased $0.4 billion to $70.4 billion in May.
     * Transport increased $0.1 billion.
     * Other business services, which includes research and development services; professional
       and management services; and technical, trade-related, and other services, increased $0.1
       billion.
     * Financial services increased $0.1 billion.

Imports (exhibits 4, 6, and 8)

Imports of goods increased $1.1 billion to $210.7 billion in May.
  Imports of goods on a Census basis increased $1.0 billion.
     * Capital goods increased $2.1 billion.
          o Telecommunications equipment increased $0.6 billion.
          o Computers increased $0.4 billion.
          o Civilian aircraft parts increased $0.3 billion.
          o Civilian aircraft engines increased $0.2 billion.
     * Consumer goods decreased $0.5 billion.
          o Pharmaceutical preparations decreased $0.6 billion.
     * Other goods decreased $0.4 billion.

  Net balance of payments adjustments increased $0.2 billion.

Imports of services decreased $0.1 billion to $47.7 billion in May.
     * Transport decreased $0.1 billion.
     * Travel (for all purposes including education) decreased $0.1 billion.
     * Other business services increased $0.1 billion.

Real Goods in 2012 Dollars – Census Basis (exhibit 11)

The real goods deficit decreased $2.2 billion to $75.3 billion in May.
     * Real exports of goods increased $2.6 billion to $153.2 billion.
     * Real imports of goods increased $0.4 billion to $228.5 billion.

Revisions

Revisions to April exports
     * Exports of goods were revised down $0.1 billion.
     * Exports of services were revised up $0.1 billion.

Revisions to April imports
     * Imports of goods were revised up less than $0.1 billion.
     * Imports of services were revised down $0.2 billion.

Goods by Selected Countries and Areas: Monthly – Census Basis (exhibit 19)

The May figures show surpluses, in billions of dollars, with South and Central America ($3.6),
Hong Kong ($2.8), Singapore ($0.9), Brazil ($0.8), United Kingdom ($0.6), and Saudi Arabia
(less than $0.1). Deficits were recorded, in billions of dollars, with China ($32.0), European
Union ($11.9), Japan ($6.0), Mexico ($5.8), Germany ($5.7), Italy ($2.6), Canada ($2.2),
India ($1.9), Taiwan ($1.4), South Korea ($1.4), France ($1.2), and OPEC ($0.2).

     * The deficit with members of OPEC decreased $3.1 billion to $0.2 billion in May. Exports
       increased $1.3 billion to $5.8 billion and imports decreased $1.9 billion to $6.0 billion.
     * The deficit with the European Union decreased $1.3 billion to $11.9 billion in May.
       Exports increased $0.2 billion to $27.5 billion and imports decreased $1.2 billion to
       $39.3 billion.
     * The deficit with China increased $1.2 billion to $32.0 billion in May. Exports increased
       $0.6 billion to $11.7 billion and imports increased $1.8 billion to $43.7 billion.

July 14, 2018 in Economics | Permalink | Comments (0)

Saturday, July 7, 2018

National Income and Product Accounts Gross Domestic Product: First Quarter 2018 (Third Estimate) Corporate Profits: First Quarter 2018 (Revised Estimate)

Real gross domestic product (GDP) increased at an annual rate of 2.0 percent in the first quarter of 2018
(table 1), according to the "third" estimate released by the Bureau of Economic Analysis. In the fourth
quarter, real GDP increased 2.9 percent.

The GDP estimate released today is based on more complete source data than were available for the
"second" estimate issued last month.  In the second estimate, the increase in real GDP was 2.2 percent.
With this third estimate for the first quarter, the general picture of economic growth remains the same;
private inventory investment and personal consumption expenditures (PCE) were revised down (see
"Updates to GDP" on page 2).

Real GDP: Percent Change from Preceding Quarter
Real gross domestic income (GDI) increased 3.6 percent in the first quarter, compared with an increase
of 1.0 percent in the fourth quarter. The average of real GDP and real GDI, a supplemental measure of
U.S. economic activity that equally weights GDP and GDI, increased 2.8 percent in the first quarter,
compared with an increase of 2.0 percent in the fourth quarter (table 1).

The increase in real GDP in the first quarter reflected positive contributions from nonresidential fixed
investment, PCE, exports, federal government spending, and state and local government spending that
were partly offset by negative contributions from residential fixed investment and private inventory
investment. Imports, which are a subtraction in the calculation of GDP, increased (table 2).

The deceleration in real GDP growth in the first quarter reflected decelerations in PCE, exports, state
and local government spending, and federal government spending and a downturn in residential fixed
investment. These movements were partly offset by a smaller decrease in private inventory investment
and a larger increase in nonresidential fixed investment. Imports, which are a subtraction in the
calculation of GDP, decelerated.

Current-dollar GDP increased 4.2 percent, or $206.0 billion, in the first quarter to a level of $19.96
trillion. In the fourth quarter, current-dollar GDP increased 5.3 percent, or $253.5 billion (table 1 and
table 3).

The price index for gross domestic purchases increased 2.7 percent in the first quarter, compared with
an increase of 2.5 percent in the fourth quarter (table 4). The PCE price index increased 2.5 percent,
compared with an increase of 2.7 percent. Excluding food and energy prices, the PCE price index
increased 2.3 percent, compared with an increase of 1.9 percent (appendix table A).


Updates to GDP

The percent change in real GDP was revised down 0.2 percentage point from the second estimate,
reflecting downward revisions to private inventory investment, PCE, and exports that were partly offset
by an upward revision to nonresidential fixed investment. Imports were revised up. For more
information, see the Technical Note. A detailed "Key Source Data and Assumptions" file is also posted
for each release.  For information on updates to GDP, see the "Additional Information" section that
follows.


                                 Advance Estimate   Second Estimate  Third Estimate
			             (Percent change from preceding quarter)

Real GDP                               2.3               2.2              2.0
Current-dollar GDP                     4.3               4.2              4.2
Real GDI                                …                2.8              3.6
Average of Real GDP and Real GDI        …                2.5              2.8
Gross domestic purchases price index   2.8               2.7              2.7
PCE price index                        2.7               2.6              2.5


Corporate Profits (table 12)

Profits from current production (corporate profits with inventory valuation adjustment and capital
consumption adjustment) increased $39.5 billion in the first quarter, in contrast to a decrease of $1.1
billion in the fourth quarter.

Profits of domestic financial corporations increased $7.0 billion in the first quarter, in contrast to a
decrease of $14.6 billion in the fourth quarter. Profits of domestic nonfinancial corporations increased
$28.8 billion, compared with an increase of $19.4 billion. Rest-of-the-world  profits increased $3.7
billion, in contrast to a decrease of $5.9 billion. In the first quarter, receipts increased $20.9 billion, and
payments increased $17.2 billion.

July 7, 2018 in Economics | Permalink | Comments (0)

Wednesday, July 4, 2018

U.S. Net International Investment Position First Quarter 2018, Year 2017, and Annual Update

First Quarter 2018

The U.S. net international investment position decreased to -$7,888.1 billion (preliminary) at the end of the first quarter of 2018 from -$7,725.0 billion (revised) at the end of the fourth quarter of 2017, according to statistics released by the Bureau of Economic Analysis (BEA). The $163.1 billion decrease reflected a $182.8 billion decrease in U.S. assets and a $19.7 billion decrease in U.S. liabilities (table 1).

The $163.1 billion decrease in the net investment position reflected net financial transactions of –$164.8 billion and net other changes in position, such as price and exchange-rate changes, of $1.7 billion (table A).

The net investment position decreased 2.1 percent in the first quarter, compared with a decrease of 1.3 percent in the fourth quarter. The net investment position decreased an average of 4.7 percent from the first quarter of 2011 through the third quarter of 2017.

U.S. assets decreased $182.8 billion to $27,616.3 billion at the end of the first quarter, mostly reflecting a decrease in direct investment assets that was partly offset by an increase in portfolio investment assets.

  • Assets excluding financial derivatives decreased $171.9 billion to $26,004.7 billion. The decrease resulted from other changes in position of –$440.8 billion and financial transactions of $268.9 billion (table A).
    • Other changes in position were driven by foreign equity price decreases that lowered the value of portfolio investment and direct investment equity assets. These price decreases were partly offset by increases from exchange-rate changes, as major foreign currencies appreciated against the U.S. dollar, raising the value of foreign-currency-denominated assets in dollar terms.
    • Financial transactions mostly reflected net acquisition of portfolio investment assets that was partly offset by net withdrawal of direct investment assets. The net withdrawal of direct investment assets resulted from U.S. parent repatriation of previously reinvested earnings. For more information on the repatriation, see the box “Effects of the 2017 Tax Cuts and Jobs Act on Components of Direct Investment.”
  • Financial derivatives decreased $10.9 billion to $1,611.6 billion, reflecting decreases in single-currency interest rate contracts and foreign exchange contracts.
Table A. Quarterly Change in the U.S. Net International Investment PositionBillions of dollars, not seasonally adjusted
  Position, 2017:IV Change in position in 2018:I Position, 2018:I
Total Attributable to:
Financial transactions Other changes in position 1
U.S. net international investment position -7,725.0 -163.1 -164.8 1.7 -7,888.1
Net position excluding financial derivatives -7,753.3 -185.3 -193.5 8.1 -7,938.6
Financial derivatives other than reserves, net 28.3 22.3 28.7 -6.4 50.5
U.S. assets 27,799.1 -182.8 (2) (2) 27,616.3
Assets excluding financial derivatives 26,176.6 -171.9 268.9 -440.8 26,004.7
Financial derivatives other than reserves 1,622.5 -10.9 (2) (2) 1,611.6
U.S. liabilities 35,524.1 -19.7 (2) (2) 35,504.4
Liabilities excluding financial derivatives 33,929.8 13.5 462.4 -448.9 33,943.3
Financial derivatives other than reserves 1,594.2 -33.2 (2) (2) 1,561.0
1 Disaggregation of other changes in position into price changes, exchange-rate changes, and other changes in volume and valuation is only presented for annual statistics (see table B and table 2 in this release).
2 Financial transactions and other changes in financial derivatives positions are available only on a net basis; they are not separately available for U.S. assets and U.S. liabilities.

U.S. liabilities decreased $19.7 billion to $35,504.4 billion at the end of the first quarter, reflecting decreases in direct investment, financial derivatives, and portfolio investment liabilities.

  • Financial derivatives decreased $33.2 billion to $1,561.0 billion, reflecting decreases in single-currency interest rate contracts and foreign exchange contracts.
  • Liabilities excluding financial derivatives increased $13.5 billion to $33,943.3 billion. The increase resulted from financial transactions of $462.4 billion and other changes in position of –$448.9 billion (table A).
    • Financial transactions reflected net incurrence of liabilities in all major investment categories, especially in portfolio investment.
    • Other changes in position were driven by U.S. equity and bond price decreases that lowered the value of portfolio investment liabilities. Equity price decreases also lowered the value of direct investment equity liabilities.

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

The 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 direct investment equity assets. The net withdrawal in the first quarter of 2018 reflects the repatriation of accumulated earnings by foreign affiliates to their U.S. parent companies 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 financial transactions highlighted in this release and related income transactions are reflected in the U.S. international transactions accounts. For more information about how the TCJA affected direct investment asset and income transactions, see “U.S. International Transactions: First Quarter 2018 and Annual Update,” which was released on June 20, 2018, and two BEA FAQs “How are the international transactions accounts affected by an increase in direct investment dividend receipts?” and “How does the 2017 Tax Cuts and Jobs Act affect BEA's business income statistics?

Annual Update

The statistics in this release reflect the annual update of the U.S. net international investment position (table 3). With this update, BEA has incorporated improved estimation methodologies and newly available and revised source data. Key changes to the statistics and the results of the annual update for 2017 are highlighted below.

  • The revised statistics for the net international investment position incorporate newly available and revised source data for 2014–2017. 

    • Revised statistics on direct investment positions and transactions in financial assets and liabilities for 2014–2017 incorporate the results of BEA’s 2014 Benchmark Survey of U.S. Direct Investment Abroad. This survey collects data on the U.S. and foreign operations of all U.S. investors that own 10 percent or more of a foreign business enterprise. For more information, see “Activities of U.S. Multinational Enterprises in the United States and Abroad: Preliminary Results From the 2014 Benchmark Survey” in the December 2016 issue of the Survey of Current Business.
    • Revised statistics on portfolio investment positions for 2016–2017 incorporate the results of the U.S. Department of Treasury’s 2016 Benchmark Survey of U.S. Ownership of Foreign Securities and 2017 Annual Survey of Foreign-Residents’ Holdings of U.S. Securities.
  • The revised statistics for the net international investment position also incorporate revisions to trade credit and advances, a component of other investment liabilities, beginning with statistics for 2010. The revisions result from an improved method for estimating exports under the U.S. Foreign Military Sales (FMS) program in the U.S. international transactions accounts (ITAs). This change in methodology also affects U.S. liabilities in the ITAs and in the international investment position accounts because the value of exports of FMS goods is recorded under general government trade credit and advances as a reduction in the liabilities of the U.S. government. U.S. government liabilities, which reflect pre-payments made by foreign purchasers, are reduced when the foreign purchaser takes ownership of the goods.
Newly Available and Revised Source Data: Key Providers and Years Affected
Agency Data Years affected
BEA Benchmark Survey of U.S. Direct Investment Abroad 2014–2017
Quarterly direct investment surveys 2015–2017
Annual direct investment surveys 2015–2016



U.S. Department of the Treasury
Aggregate Holdings of Long-Term Securities by U.S. and Foreign Residents 2014–2017
Foreign-Residents’ Holdings of U.S. Securities, including Selected Money Market Instruments 2017
U.S. Ownership of Foreign Securities, including Selected Money Market Instruments 2016–2017
Reports by Financial Institutions of Liabilities to, and Claims on, Foreign Residents by U.S. Residents 2014–2017
Reports of Liabilities to, and Claims on, Unaffiliated Foreign Residents by U.S. Resident Non-Financial Institutions 2014–2017
Reports of Holdings of, and Transactions in, Financial Derivatives Contracts with Foreign Residents 2014–2017

A more detailed discussion of the new estimation methodologies and other changes appears in “Preview of the 2018 Annual Update of the International Economic Accounts” in the May 2018 issue of the Survey of Current Business. Additional information on the updates to the U.S. international investment position accounts and the U.S. international transactions accounts will be provided in the July issue of the Survey of Current Business.

Annual Update for 2017

The U.S. net international investment position increased to -$7,725.0 billion (revised) at the end of 2017 from -$8,181.6 billion (revised) at the end of 2016. The $456.6 billion increase reflected a $3,738.5 billion increase in U.S. assets and a $3,281.9 billion increase in U.S. liabilities (table 2).

The $456.6 billion increase in the net investment position reflected net financial transactions of –$331.9 billion and net other changes in position, such as price and exchange-rate changes, of $788.4 billion (table B).

The net investment position increased 5.6 percent in 2017, compared with a decrease of 9.6 percent in 2016.

U.S. assets increased $3,738.5 billion to $27,799.1 billion at the end of 2017, mostly reflecting increases in portfolio investment and direct investment assets that were partly offset by a decrease in financial derivatives.

  • Assets excluding financial derivatives increased $4,336.5 billion to $26,176.6 billion. The increase resulted from other changes in position of $3,153.7 billion and financial transactions of $1,182.7 billion (table B).
      • Other changes in position mostly reflected (1) foreign equity price increases that raised the value of portfolio investment and direct investment equity assets and (2) the appreciation of major foreign currencies against the U.S. dollar that raised the value of foreign-currency-denominated assets in dollar terms.
        • Financial transactions reflected net acquisition of assets in all major investment categories except reserve assets.
  • Financial derivatives decreased $598.0 billion to $1,622.5 billion, reflecting decreases in single-currency interest rate contracts and foreign exchange contracts.

U.S. liabilities increased $3,281.9 billion to $35,524.1 billion at the end of 2017, mostly reflecting increases in portfolio investment and direct investment liabilities that were partly offset by a decrease in financial derivatives.

  • Liabilities excluding financial derivatives increased $3,849.9 billion to $33,929.8 billion. The increase resulted from other changes in position of $2,312.3 billion and financial transactions of $1,537.7 billion (table B).
    • Other changes in position mostly reflected U.S. equity price increases that raised the value of portfolio investment and direct investment equity liabilities.
    • Financial transactions reflected net incurrence of liabilities in all major investment categories.
  • Financial derivatives decreased $568.1 billion to $1,594.2 billion, reflecting decreases in single-currency interest rate contracts and foreign exchange contracts.
Table B. Annual Change in the U.S. Net International Investment PositionBillions of dollars
  Position, 2016 Change in position in 2017 Position, 2017
Total Attributable to:
Financial transactions Other changes in position
Total Price changes Exchange-rate changes Changes in volume and valuation n.i.e.
U.S. net investment position -8,181.6 456.6 -331.9 788.4 (1) (1) (1) -7,725.0
Net position excl. derivatives -8,239.8 486.5 -354.9 841.4 -349.6 1,176.2 14.9 -7,753.3
Financial derivatives, net 58.2 -29.9 23.1 -53.0 (1) (1) (1) 28.3
U.S. assets 24,060.6 3,738.5 (2) (2) (2) (2) (2) 27,799.1
Assets excl. derivatives 21,840.1 4,336.5 1,182.7 3,153.7 1,837.9 1,280.2 35.6 26,176.6
Financial derivatives 2,220.5 -598.0 (2) (2) (2) (2) (2) 1,622.5
U.S. liabilities 32,242.2 3,281.9 (2) (2) (2) (2) (2) 35,524.1
Liabilities excl. derivatives 30,079.9 3,849.9 1,537.7 2,312.3 2,187.6 104.0 20.7 33,929.8
Financial derivatives 2,162.3 -568.1 (2) (2) (2) (2) (2) 1,594.2
1 Data are not separately available for price changes, exchange-rate changes, and changes in volume and valuation not included elsewhere.
2 Financial transactions and other changes in financial derivatives positions are available only on a net basis; they are not separately available for U.S. assets and U.S. liabilities.

Next release: September 26, 2018, at 8:30 A.M. EDT

July 4, 2018 in Economics | Permalink | Comments (0)

Tuesday, June 26, 2018

U.S. International Transactions: First Quarter 2018 and Annual Update

Current-Account Balance

The U.S. current-account deficit increased to $124.1 billion (preliminary) in the first quarter
of 2018 from $116.1 billion (revised) in the fourth quarter of 2017, according to statistics
released by the Bureau of Economic Analysis (BEA). 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.

Quarterly U.S. Current-Account and Component Balance

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

Quarterly U.S. Current-Account Transactions

                           Current-Account Transactions (tables 1-5)

Exports of goods and services and income receipts

Exports of goods and services and income receipts increased $23.0 billion in the first quarter
to $913.4 billion.

   * Primary income receipts increased $9.8 billion 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 the box “Effects of the 2017 Tax Cuts
     and Jobs Act on Components of Direct Investment.”

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

Imports of goods and services and income payments

Imports of goods and services and income payments increased $30.9 billion in the first quarter
to $1,037.5 billion.

   * Goods imports increased $17.6 billion 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 to $196.8 billion, reflecting increases in
     direct investment income, portfolio investment income, and other investment income.

BOX.___________________________________________________________________________________________

          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 in a period typically consists of a portion that is repatriated
to the parent company in the United States in the form of dividends and a portion that is reinvested
in foreign affiliates. At times, repatriation of dividends exceeds current-period earnings,
resulting in negative values being recorded for reinvested earnings. 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 (table 4).

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 -$119.6 billion in the first quarter of 2018 (table 6).

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

Direct Investment Income Receipts and Components

_______________________________________________________________________________________________

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

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.

Financial assets

Net U.S. acquisition of financial assets excluding financial derivatives increased $127.6 billion
in the first quarter to $254.7 billion.

   * 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.

   * 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 in
     response to the TCJA. For more information, see the box “Effects of the 2017 Tax Cuts and
     Jobs Act on Components of Direct Investment.”

Liabilities

Net U.S. incurrence of liabilities excluding financial derivatives increased $304.9 billion in the
first quarter to $464.1 billion.

   * 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 funds 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 instrument 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.

Financial derivatives

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 (table 1)

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

         Updates to Fourth Quarter 2017 International Transactions Accounts Aggregates
                            Billions of dollars, seasonally adjusted

                                                      Preliminary estimate     Revised estimate

Current-account balance                                       -128.2                -116.1
   Goods balance                                              -214.3                -212.4
   Services balance                                             60.4                  64.6
   Primary-income balance                                       57.2                  62.4
   Secondary-income balance                                    -31.5                 -30.7
Net lending (+)/borrowing (-) from
   financial-account transactions                              -29.8                 -31.3
Statistical discrepancy                                         98.4                  84.9

June 26, 2018 in Economics | Permalink | Comments (0)

Monday, June 18, 2018

40% of wealth firms leaving London to EU locations because of BREXIT: Ireland and Luxembourg Winners

Read the complete EY Brexit Tracker Wealth and Asset Management update here

  • 39% (22 out of 57) of wealth and asset management firms have said publicly that they are considering or have confirmed that they are moving some of their operations and/or staff out of the UK
  • 25% (14 out of 57) of firms have confirmed at least one location; 10 firms have confirmed Dublin, and 4 have confirmed Luxembourg
  • 28% (16 out of 57) of firms have made, or announced their intention to make, regulatory or structural changes to their products because of Brexit. These changes include:
    • Shifting client assets from the UK into European vehicles
    • Launching new funds abroad / creating overseas fund ranges, for example OEIC / Sicav
  • 23% (13 out of 57) of firms have announced that they are hiring or have hired new staff since the Referendum, either in Europe or in the UK as a direct result of Brexit

 

June 18, 2018 in Economics | Permalink | Comments (0)

Tuesday, June 5, 2018

National Income and Product Accounts Gross Domestic Product: First Quarter 2018 (Second Estimate) Corporate Profits: First Quarter 2018 (Preliminary Estimate)

Real gross domestic product (GDP) increased at an annual rate of 2.2 percent in the first quarter of 2018
(table 1), according to the "second" estimate released by the Bureau of Economic Analysis. In the fourth
quarter of 2017, real GDP increased 2.9 percent.

The GDP estimate released today is based on more complete source data than were available for the
"advance" estimate issued last month. In the advance estimate, the increase in real GDP was 2.3
percent. With this second estimate for the first quarter, the general picture of economic growth remains
the same; downward revisions to private inventory investment, residential fixed investment, and
exports were partly offset by an upward revision to nonresidential fixed investment (see "Updates to
GDP" on page 2).

Real GDP: Percent Change from Preceding Quarter
Real gross domestic income (GDI) increased 2.8 percent in the first quarter, compared with an increase
of 1.0 percent (revised) in the fourth quarter. The average of real GDP and real GDI, a supplemental
measure of U.S. economic activity that equally weights GDP and GDI, increased 2.5 percent in the first
quarter, compared with an increase of 2.0 percent in the fourth quarter (table 1).

The increase in real GDP in the first quarter reflected positive contributions from nonresidential fixed
investment, personal consumption expenditures (PCE), exports, private inventory investment, federal
government spending, and state and local government spending that were partly offset by a negative
contribution from residential fixed investment. Imports, which are a subtraction in the calculation of
GDP, increased (table 2).

The deceleration in real GDP growth in the first quarter reflected decelerations in PCE, exports, state
and local government spending, and federal government spending and a downturn in residential fixed
investment. These movements were partly offset by an upturn in private inventory investment and a
larger increase in nonresidential fixed investment. Imports, which are a subtraction in the calculation of
GDP, decelerated.

Current-dollar GDP increased 4.2 percent, or $202.7 billion, in the first quarter to a level of $19.96
trillion. In the fourth quarter, current-dollar GDP increased 5.3 percent, or $253.5 billion (table 1 and
table 3).

The price index for gross domestic purchases increased 2.7 percent in the first quarter, compared with
an increase of 2.5 percent in the fourth quarter (table 4). The PCE price index increased 2.6 percent,
compared with an increase of 2.7 percent. Excluding food and energy prices, the PCE price index
increased 2.3 percent, compared with an increase of 1.9 percent (appendix table A).


Updates to GDP

The percent change in real GDP was revised down 0.1 percentage point from the advance estimate,
primarily reflecting downward revisions to private inventory investment, residential fixed investment,
and exports that were partly offset by an upward revision to nonresidential fixed investment.  For more
information, see the Technical Note. A detailed "Key Source Data and Assumptions" file is also posted
for each release. For information on updates to GDP, see the "Additional Information" section that
follows.


                                           Advance Estimate   Second Estimate

                                         (Percent change from preceding quarter)
Real GDP                                          2.3               2.2
Current-dollar GDP                                4.3               4.2
Real GDI                                           …                2.8
Average of Real GDP and Real GDI                   …                2.5
Gross domestic purchases price index              2.8               2.7
PCE price index                                   2.7               2.6


For the fourth quarter of 2017, the percent change in real GDI was revised from 0.9  percent to 1.0
percent based on newly available fourth-quarter wages and salaries data from the BLS Quarterly Census
of Employment and Wages program.

Corporate Profits (table 12)

Profits from current production (corporate profits with inventory valuation adjustment and capital
consumption adjustment) decreased $12.4 billion in the first quarter, compared with a decrease of $1.1
billion in the fourth quarter.

Profits of domestic financial corporations increased $2.2 billion in the first quarter, in contrast to a
decrease of $14.6 billion in the fourth quarter. Profits of domestic nonfinancial corporations decreased
$19.0 billion, in contrast to an increase of $19.4 billion. Rest-of-the-world profits increased $4.4 billion,
in contrast to a decrease of $5.9 billion. In the first quarter, receipts increased $20.0 billion, and
payments increased $15.7 billion.

The 2017 Tax Cuts and Jobs Act includes several provisions that impact the business income statistics in
the national income and product accounts (NIPAs). The provisions do not directly impact corporate
profits from current production or GDI but do impact taxes on corporate income and net dividends in
the first quarter of 2018. For more information, see the Technical Note.

June 5, 2018 in Economics | Permalink | Comments (0)

Monday, June 4, 2018

SOI Tax Stats - SOI Bulletin: Spring 2018

The Internal Revenue Service today announced that the Spring 2018 Statistics of Income Bulletin is now available on IRS.gov. The Statistics of Income (SOI) Division produces the online Bulletin quarterly, providing the most recent data available from various tax and information returns filed by U.S. taxpayers. This issue includes articles on the following topics:

  • Individual Income Tax Returns, Preliminary Data, Tax Year 2016: For Tax Year 2016, taxpayers filed 150.3 million U.S. individual income tax returns, a decrease of 0.2 percent from the 150.6 million returns filed for Tax Year 2015.  For 2016, adjusted gross income (AGI) only increased 0.1 percent to $10.2 trillion. This small increase in AGI reflected minor increases in salaries and wages (1.5 percent) and taxable pensions and annuities (0.4 percent) along with declines in partnership and S corporation net income less loss (1.1 percent) and net capital gains (11.7 percent).

  • Partnership Returns, Tax Year 2015: The number of partnerships in the United States continued to increase for Tax Year 2015. Partnerships filed more than 3.7 million returns for the year, representing more than 27 million partners. The real estate and leasing sector contained almost half of all partnerships (49.7 percent) and over a quarter of all partners (29.2 percent).

SOI Bulletin articles are available for download at IRS.gov/statistics.

June 4, 2018 in Economics | Permalink | Comments (0)

Sunday, June 3, 2018

Exempt Organization Financial Data for Calendar Year 2017

Two new extracts of tax-exempt organization financial data for Calendar Year 2017 are now available on IRS's Tax Stats Web page.

These annual extracts contain selected financial data from filers of information returns, Forms 990 and 990-EZ (short form), Return of Organization Exempt from Income Tax, processed for program administrative purposes during Calendar Year 2017.

The data are in ASCII space-delimited format. Supporting documentation is also available.

June 3, 2018 in Economics | Permalink | Comments (0)

PERSONAL INCOME AND OUTLAYS, APRIL 2018

Personal income increased $49.5 billion (0.3 percent) in April according to estimates released today by
the Bureau of Economic Analysis. Disposable personal income (DPI) increased $60.9 billion (0.4 percent)
and personal consumption expenditures (PCE) increased $79.8 billion (0.6 percent).

Real DPI increased 0.2 percent in April and Real PCE increased 0.4 percent. The PCE price index increased
0.2 percent. Excluding food and energy, the PCE price index increased 0.2 percent.

                                                2017                  2018
                                                Dec.     Jan.     Feb.     Mar.     Apr.
                                                  Percent change from preceding month
Personal income:
 Current dollars                                0.4      0.4      0.3      0.2      0.3
Disposable personal income:
 Current dollars                                0.4      0.8      0.3      0.2      0.4
 Chained (2009) dollars                         0.3      0.4      0.1      0.2      0.2
Personal consumption expenditures (PCE):
 Current dollars                                0.5      0.1      0.0      0.5      0.6
 Chained (2009) dollars                         0.3     -0.2     -0.1      0.5      0.4
Price indexes:
 PCE                                            0.1      0.4      0.1      0.0      0.2
 PCE, excluding food and energy                 0.2      0.3      0.2      0.2      0.2

Price indexes:                                  Percent change from month one year ago
 PCE                                            1.7      1.6      1.7      2.0      2.0
 PCE, excluding food and energy                 1.5      1.5      1.5      1.8      1.8


BOX.__________________________________________
                Quarterly Census of Employment and Wage Data Included in the Fourth Quarter of 2017

This news release includes revised estimates of wages and salaries, personal taxes, and contributions for
government social insurance for October through December 2017 (fourth quarter). These estimates reflect the
incorporation of newly available fourth-quarter wage and salary tabulations from the Bureau of Labor Statistics’
Quarterly Census of Employment and Wages (QCEW) program.
______________________________________________

The increase in personal income in April primarily reflected increases in wages and salaries, in personal
interest income, and in government social benefit payments to persons, specifically veteran’s benefits and Medicare (table 3).

The $42.8 billion increase in real PCE in April reflected an increase of $15.4 billion in spending for goods
and a $27.5 billion increase in spending for services (table 7). Within goods, spending for gasoline and other
energy goods was a leading contributor to the increase. Within services, the largest contributor to the increase
was spending for household utilities. Detailed information on monthly real PCE spending can be found in Table 2.3.6U.

Personal outlays increased $86.9 billion in April (table 3). Personal saving was $419.6 billion in April and the personal
saving rate, personal saving as a percentage of disposable personal income, was 2.8 percent (table 1).

Updates to Personal Income and Outlays

Estimates have been revised for October through March. The percent change from the preceding month for current-dollar personal
income, and for current-dollar and chained (2009) dollar DPI and PCE -- revised and as published in last month's release -- are
shown below.

                                                        Change from preceding month
                                               February                                    March
                                Previous   Revised   Previous   Revised   Previous   Revised   Previous   Revised
                               (Billions of dollars)      (Percent)      (Billions of dollars)      (Percent)
Personal income:
 Current dollars                    57.1      54.1        0.3       0.3       47.8      40.7        0.3       0.2
Disposable personal income:
 Current dollars                    42.6      41.9        0.3       0.3       39.8      34.0        0.3       0.2
 Chained (2009) dollars             15.9      18.5        0.1       0.1       30.5      25.3        0.2       0.2
Personal consumption expenditures:
 Current dollars                     1.6       5.9        0.0       0.0       61.7      73.9        0.4       0.5
 Chained (2009) dollars            -18.6     -11.8       -0.2      -0.1       50.0      60.5        0.4       0.5

BOX.__________________________________________
                                Upcoming Annual Update of the National Income and Product Accounts

BEA will release the results of the 15th comprehensive (or benchmark) update of the national income and product accounts (NIPAs)
in conjunction with the second quarter 2018 "advance" estimate on July 27, 2018.  For more information, see the Technical Note.
Details on the planned statistical, definitional, and presentational changes are available in the April Survey of Current Business
article "Preview of the 2018 Comprehensive Update of the National Income and Product Accounts." An article in the September Survey
will describe the estimates in detail.  Revised NIPA table stubs and news release stubs will be available in June.

June 3, 2018 in Economics | Permalink | Comments (0)

Tuesday, May 8, 2018

U.S. International Trade in Goods and Services March 2018

 

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced today that the goods and services deficit was $49.0 billion in March, down $8.8 billion from $57.7 billion in
February, revised.

Goods and Services Trade Deficit

Exports, Imports, and Balance (exhibit 1)

March exports were $208.5 billion, $4.2 billion more than February exports. March imports were $257.5 billion, $4.6 billion less than February imports.

The March decrease in the goods and services deficit reflected a decrease in the goods deficit of $7.5 billion to $69.5 billion and an increase in the services surplus of $1.3 billion to
$20.5 billion.

Year-to-date, the goods and services deficit increased $25.5 billion, or 18.5 percent, from the same period in 2017. Exports increased $39.2 billion or 6.8 percent. Imports increased $64.7
billion or 9.1 percent.

Three-Month Moving Averages (exhibit 2)

The average goods and services deficit decreased $1.7 billion to $54.5 billion for the three months ending in March.
     * Average exports increased $1.6 billion to $204.6 billion in March.
     * Average imports decreased less than $0.1 billion to $259.1 billion in March.

Year-over-year, the average goods and services deficit increased $8.5 billion from the three months ending in March 2017.
     * Average exports increased $13.1 billion from March 2017.
     * Average imports increased $21.6 billion from March 2017.

Exports (exhibits 3, 6, and 7)

Exports of goods increased $3.7 billion to $140.9 billion in March. Exports of goods on a Census basis increased $3.9 billion.
     * Capital goods increased $1.9 billion.
          o Civilian aircraft increased $1.9 billion.
     * Foods, feeds, and beverages increased $1.0 billion.
          o Soybeans increased $0.5 billion.
          o Corn increased $0.3 billion.
     * Industrial supplies and materials increased $0.9 billion.
          o Crude oil increased $0.4 billion.
          o Other petroleum products increased $0.3 billion.

  Net balance of payments adjustments decreased $0.2 billion.

Exports of services increased $0.4 billion to $67.6 billion in March.
     * Maintenance and repair services increased $0.1 billion.
     * Travel (for all purposes including education) increased $0.1 billion.
     * Transport increased $0.1 billion.

Imports (exhibits 4, 6, and 8)

Imports of goods decreased $3.7 billion to $210.4 billion in March. Imports of goods on a Census basis decreased $3.6 billion.
     * Capital goods decreased $1.5 billion.
          o Computer accessories decreased $0.5 billion.
          o Telecommunications equipment decreased $0.5 billion.
          o Semiconductors decreased $0.5 billion.
     * Consumer goods decreased $0.9 billion.
          o Toys, games, and sporting goods decreased $0.7 billion.
          o Televisions and video equipment decreased $0.7 billion.
     * Industrial supplies and materials decreased $0.7 billlion.
          o Crude oil decreased $0.5 billion.

  Net balance of payments adjustments decreased $0.1 billion.

Imports of services decreased $0.9 billion to $47.1 billion in March.

     * Charges for the use of intellectual property decreased $0.9 billion. Charges for February included payments for the rights to broadcast the 2018 Winter Olympic Games.
     * Transport decreased $0.1 billion.

Real Goods in 2009 Dollars – Census Basis (exhibit 11)

The real goods deficit decreased $6.9 billion to $62.1 billion in March.
     * Real exports of goods increased $3.7 billion to $133.2 billion.
     * Real imports of goods decreased $3.1 billion to $195.3 billion.

Revisions

Revisions to February exports
     * Exports of goods were revised down less than $0.1 billion.
     * Exports of services were revised down less than $0.1 billion.

Revisions to February imports
     * Imports of goods were revised down $0.1 billion.
     * Imports of services were revised up $0.2 billion.

Goods by Selected Countries and Areas: Monthly – Census Basis (exhibit 19)

The March figures show surpluses, in billions of dollars, with Hong Kong ($3.3), South and Central America ($3.1), United Kingdom ($1.2), Brazil ($0.8), and Singapore ($0.3). Deficits
were recorded, in billions of dollars, with China ($35.4), European Union ($12.4), Mexico ($7.0), Japan ($5.9), Germany ($5.0), Italy ($2.3), France ($1.5), OPEC ($1.4), India ($1.4),
Taiwan ($1.3), South Korea ($1.2), Saudi Arabia ($0.3), and Canada ($0.2).

     * The deficit with Germany decreased $1.6 billion to $5.0 billion in March. Exports increased $0.4 billion to $5.1 billion and imports decreased $1.2 billion to $10.1 billion.
     * The deficit with members of OPEC decreased $0.8 billion to $1.4 billion in March. Exports increased $0.4 billion to $4.9 billion and imports decreased $0.4 billion to $6.3 billion.
     * The deficit with China increased $0.7 billion to $35.4 billion in March. Exports increased $1.6 billion to $12.4 billion and imports increased $2.3 billion to $47.7 billion.

					  *    *    *

All statistics referenced are seasonally adjusted; statistics are on a balance of payments basis unless otherwise specified. Additional statistics, including not seasonally adjusted
statistics and details for goods on a Census basis, are available in Exhibits 1-20b of this release. For information on data sources, definitions, and revision procedures, see the
explanatory notes in this release. The full release can be found at www.census.gov/foreign-trade/Press-Release/current_press_release/index.html or
www.bea.gov/newsreleases/international/trade/tradnewsrelease.htm. The full schedule is available in the Census Bureau’s Economic Briefing Room at
www.census.gov/economic-indicators/.

 

May 8, 2018 in Economics | Permalink | Comments (0)

Friday, May 4, 2018

Workers in OECD countries pay one quarter of wages in taxes

Workers in OECD countries paid just over a quarter of their gross wages in tax on average in 2017, with just over half of countries seeing small increases in the personal average tax rate, according to a new OECD report.

Taxing Wages 2018 shows that the “net personal average tax rate” – income tax and social security contributions paid by employees, minus any family benefits received, as a share of gross wages – was 25.5% across the OECD. This OECD-wide average rate, calculated for a single person with no children earning an average wage, has remained stable in recent years, but it covers country averages that range from below 15% in Chile, Korea and Mexico to over 35% in Belgium, Denmark and Germany.  

Increases in the average personal tax rate in 20 of the OECD’s 35 member countries in 2017 were mainly due to wage increases that reduced the impact of tax-free allowances and credits. Average tax rates fell in 13 countries and were unchanged in two (Chile and Hungary). The biggest increases in the tax rate were in the Czech Republic (0.5 percentage points),

Turkey (0.5 percentage points) and Mexico (0.4 percentage points), and the largest decreases were in Luxembourg (-2.0 percentage points), Finland (-0.6 percentage points) and Iceland (-0.5 percentage points). [See Table 6.2c in the report.]

 

The 2018 edition of Taxing Wages also looks at how tax systems affect the disposable income of households with children. It finds that almost all OECD countries provide a reduced personal average tax rate for households with children relative to households at the same income level without children. This is due primarily to the provision of cash transfers to parents.

 

On average, a one-earner married couple on an average wage with two children pays 14% of gross wages in taxes, due to reduced personal income taxes and cash benefits. The gap is even wider for lower income households. For example, looking at single workers earning 67% of the average wage, a worker without children pays 21.3% of their wages in taxes, whereas a worker with children pays only 1.8%, on average. On the whole, the size of the fiscal benefit for families with children has increased since 2000, and this is especially the case for single workers with children, whose tax rates are often negative.

 

                                       <download the data in Excel>

 “This easing of the income tax burden on families with children, especially on single parents, is encouraging,” said Pascal Saint-Amans, Director of the OECD’s Centre for Tax Policy and Administration. “Setting tax policy in a way that maintains work incentives, particularly for low and middle-income earners, is vital to spur inclusive growth.”

If taxes and costs paid by employers are also considered, Taxing Wages 2018 finds that overall taxes on labour costs decreased on the average worker for the fourth consecutive year in 2017, due to lower employer social security contributions.

This so-called ‘tax wedge’ – total taxes on labour costs paid by employees and employers, minus family benefits, as a percentage of the labour cost to the employer – fell by 0.13 percentage points to stand at 35.9% of labour costs for the OECD area. The decline – largely due to big reductions in Finland, Hungary and Luxembourg – continues a decreasing trend since 2012 that partially reverses the increases that had been observed in the years immediately after the global economic crisis.

Key findings

Net personal average tax rates (NPATR) for single people and families  

  • In 2017, the highest average NPATR for single workers with no children earning the average wage were in Belgium (40.5%), Germany (39.9%) and Denmark (35.8%). The lowest were in Chile (7%), Mexico (11.2%) and Korea (14.5%). The OECD average was stable at 25.5%. 
  • The average NPATR for one-earner families with children was 14.0% in 2017. 
  • The highest NPATRs for one-earner families with two children at the average wage were in Turkey (25.9) and Denmark (25.3%). The lowest NPATRs were in the Czech Republic (0.7%), Canada and Ireland (both 1.2%). The NPATR was negative for Poland (-4.8%) as cash benefits exceeded taxes and social contributions. 
  • The NPATR for one-earner families with two children rose in 25 countries in 2017, decreased in nine and was unchanged in Chile. The largest rises were in Ireland (2.88 percentage points (p.p.)) and Australia (2.90 p.p.). The largest falls were in Luxembourg (1.03 p.p.) and Poland (5.06 p.p.). The OECD average rose by 0.23 percentage points.


Tax wedges for single people and families with children 

  • The decline in the OECD area tax wedge in 2017 was largely due to big reductions in Finland, Hungary and Luxembourg. The average tax wedge fell in 16 countries and rose in 19 countries.
  • In 2017, the highest average tax wedges for single workers with no children earning the average national wage were in Belgium (53.7%), Germany (49.7%), Italy (47.7%), France (47.6%) and Austria (47.4%). The lowest were in Chile (7%), New Zealand (18.1%) and Mexico (20.4%). The OECD average decreased 0.13 percentage points to 35.9%.
  • The average tax wedge for a one-earner family with children in 2017 was 26.1%. 
  • The highest tax wedge for one-earner families with two children at the average wage in 2017 was in France (39.4). Belgium, Finland, Greece, Italy and Sweden were between 38% and 39%. For this family type, New Zealand had the lowest tax wedge (6.4%), followed by Chile (7.0%) and Switzerland (9.1%). 
  • The largest increases in the tax wedge for this family type in 2017 were in Australia (2.74 percentage points), Ireland (2.60 p.p.) and Latvia (1.06 p.p.). The largest decreases were in Poland (4.35 p.p.) and Hungary (3.05 p.p.). 
  • The tax wedge for one-earner families with children is lower than for single people without children in all OECD countries except Chile and Mexico, where tax levels are the same for both. The gap is over 15% of labour costs in Belgium, Canada, the Czech Republic, Germany, Hungary, Ireland, Luxembourg and Slovenia. 

Download Taxing Wages 2018: http://webexchanges.oecdcode.org/vpfhmzgA/2318171e.pdf

May 4, 2018 in Economics | Permalink | Comments (0)

Thursday, May 3, 2018

FDI drops 18% in 2017 as corporate restructurings decline

Global FDI flows reached their lowest level since 2013 (USD 280 billion) in the fourth quarter of 2017. Inflows to the OECD area decreased by 37%, largely driven by decreases in the United Kingdom and the United States from high levels in 2016. Outflows from the OECD area decreased by a more modest 4%.

 Global FDI flows decreased by 18% to USD 1 411 billion in 2017 compared to 2016.
 In the fourth quarter of 2017, FDI flows reached their lowest level since 2013 (USD 280 billion).
 Inflows to the OECD decreased by 37%, largely driven by decreases in the United Kingdom and the United States from high levels in 2016. Outflows from the OECD decreased by a more modest 4%.
 In contrast, FDI inflows to non-OECD G20 economies increased by 3% while FDI outflows decreased by 33% as FDI outflows from China declined for the first time since 2005.
 The United States remained the largest source of FDI worldwide by a long stretch, followed by Japan, China, the United Kingdom, Germany and Canada.
 China, after being a net outward direct investor for the first time in 2016, became a net inward investor in 2017.
 Although the majority of OECD countries account for a smaller share of global GDP than they did at the start of the global financial crisis, most still account for a larger share of global inward and outward FDI, indicating that they remain among the more financially integrated economies in the world.

See full statistics and report here:  Download FDI-in-Figures-April-2018

May 3, 2018 in Economics | Permalink | Comments (0)

Sunday, April 29, 2018

Growth Gathers Steam in Latin America and the Caribbean – Now is the Time to Build Fiscal Strength for Inclusive Growth

The economies of Latin America and the Caribbean (LAC) have turned the corner after a year of tepid growth and six of stagnation, providing an opportunity for countries to solidify their fiscal positions and lay the foundation for long-term inclusive growth.

In its latest semiannual report, “Fiscal Adjustment in Latin America and the Caribbean: Short-Run Pain, Long-Run Gain?”, the World Bank’s Chief Economist Office for Latin America and the Caribbean examines the quickening of growth in the region due in large part to a positive external environment including rising commodity prices, growth in the U.S. and China, and high international liquidity. However, many countries are in a fragile fiscal situation after several years of weak growth.

LAC grew by 1.1% in 2017 and is expected to grow by 1.8% in 2018 and 2.3% in 2019, according to the report. Excluding Venezuela, the estimates are for growth of 2.6% in 2018 and 2.8% in 2019.

The return to growth is being led by the large South American economies of Brazil and Argentina. Brazil is expected to grow by 2.4% in 2018 and 2.5% in 2019. Argentina is expected to grow 2.7% in 2018 and 2.8% in 2019.

Mexico is expected to increase its growth rate to 2.3% and 2.5% in 2018 and 2019, respectively. Central America is expected to post growth of 3.8% in 2018 and 2019, while the Caribbean will likely grow 3.5% in 2018 and 3.4% in 2019.

Despite these positive signs, 31 out of the 32 LAC countries ran an overall fiscal deficit in 2017 and public debt for the whole region stands at 57.6% of GDP.

“Persistent deficits and high levels of debt can jeopardize the hard-won gains made over the last decades in lowering inflation, reducing poverty and inequality, and fueling inclusive growth,” said Carlos Vegh, World Bank Chief Economist for Latin America and the Caribbean“In the long run, lower fiscal deficits – and lower public debt burdens – would help consolidate those gains and increase growth.”

Fiscal adjustments during good times are important to build fiscal space, the report finds. This enables countercyclical fiscal policies to prepare for the next time economic headwinds come along and to protect the most vulnerable. It also frees resources to deal with potential risks stemming from natural disasters like hurricanes and earthquakes.

Several countries, like Ecuador, Uruguay, México, Colombia, Argentina, El Salvador and Panama, have started gradual fiscal adjustments. Now is the time to speed up the pace of fiscal and structural reforms and strengthen or implement fiscal rules, as needed.

However, the report says these fiscal adjustments should be gradual and not rely too heavily on cutting public investment or social transfers, which are vital to economic growth and poverty reduction. Infrastructure investment is particularly important. Inefficient and non-productive government spending should be the focus of reform.

The challenge is finding the sweet spot for just how much fiscal adjustment is needed. One crucial issue to consider in deciding on an appropriate amount public debt reduction and other fiscal reforms is the levels needed to achieve an investment grade. Steps in this direction can lead to huge savings on external debt and free up resources to support poverty reduction and inclusive growth, according to the report.  

April 29, 2018 in Economics | Permalink | Comments (0)

Friday, April 27, 2018

Gross Domestic Product by Industry: Fourth Quarter and Annual 2017

Durable Goods Manufacturing Led Growth in the Fourth Quarter

For the full release and tables, visit http://www.bea.gov/newsreleases/industry/gdpindustry/gdpindnewsrelease.htm


Durable goods manufacturing; construction; and professional, scientific, and technical services were the leading contributors to the increase in U.S. economic growth in the fourth quarter of 2017. According to gross domestic product (GDP) by industry statistics released by the Bureau of Economic Analysis, 16 of 22 industry groups contributed to the overall 2.9 percent increase in real GDP in the fourth quarter.

Chart of Real GDP and Real Value Added by Sector

For the durable goods manufacturing industry group, real value added—a measure of an industry’s contribution to GDP—increased 7.2 percent in the fourth quarter, after increasing 7.5 percent in the third quarter. The fourth quarter growth primarily reflected increases in motor vehicles, bodies and trailers, and parts; computer and electronic products; and fabricated metal products.

Construction increased 8.5 percent, after decreasing 1.2 percent. This was the largest increase since the first quarter of 2016.

Professional, scientific, and technical services increased 4.2 percent, after increasing 2.7 percent. The fourth quarter growth primarily reflected an increase in miscellaneous professional, scientific, and technical services, which includes accounting and tax preparation services, and scientific research and development services.

Chart of Real Value Added by Industry

Other highlights

Finance and insurance decreased 5.7 percent in the fourth quarter, after increasing 14.7 percent in the third quarter. The decrease was primarily attributed to a decrease in Federal Reserve banks, credit intermediation, and related activities, as well as a decrease in securities, commodity contracts, and investments.

Information services decreased 0.2 percent, after increasing 9.0 percent. This decrease was primarily attributed to broadcasting and telecommunications.

Agriculture, forestry, fishing, and hunting decreased 1.7 percent, after decreasing 2.4 percent.

Gross output by industry

Economy-wide, real gross output—principally a measure of an industry’s sales or receipts, which includes sales to final users in the economy (GDP) and sales to other industries (intermediate inputs)—increased 4.7 percent in the fourth quarter. This reflected increases of 7.8 percent for the private goods-producing sector, 4.1 percent for the private services-producing sector, and 1.5 percent for the government sector. Overall, 18 of 22 industry groups contributed to the increase in real gross output.

Chart of Real Gross Output by Industry

Real gross output for construction increased 10.9 percent in the fourth quarter, after decreasing 5.5 percent in the third quarter. This was the largest increase since the first quarter of 2016.

Durable goods manufacturing increased 9.0 percent, after increasing 6.8 percent. This industry has increased for six consecutive quarters.

Professional, scientific, and technical services increased 6.1 percent, after decreasing 1.3 percent.

2017 GDP by industry

Real GDP increased 2.3 percent in 2017 (that is, from the 2016 annual level to the 2017 annual level). The private goods- and services-producing sectors, as well as the government sector, contributed to the increase. Growth was widespread, with 20 of 22 industry groups contributing to the increase. Real estate and rental and leasing, health care and social assistance, and durable goods manufacturing were the leading contributors to the increase in real GDP.

For the real estate and rental and leasing industry, real value added increased 1.8 percent in 2017, after increasing 2.4 percent in 2016. This was the eighth consecutive annual increase.

Health care and social assistance increased 3.0 percent, after increasing 2.4 percent, primarily reflecting an increase in ambulatory health care services.

Durable goods manufacturing, which includes computer and electronic products, machinery, and fabricated metal products, increased 3.4 percent, after decreasing 0.2 percent. This was the largest increase in durable goods manufacturing since 2011.

April 27, 2018 in Economics | Permalink | Comments (0)

Monday, April 9, 2018

U.S. International Trade in Goods and Services February 2018

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced today that the goods
and services deficit was $57.6 billion in February, up $0.9 billion from $56.7 billion in January,
revised. 
Exports, Imports, and Balance (exhibit 1)
Goods and Services Trade Deficit
February exports were $204.4 billion, $3.5 billion more than January exports. February imports
were $262.0 billion, $4.4 billion more than January imports.

The February increase in the goods and services deficit reflected an increase in the goods deficit
of $0.3 billion to $77.0 billion and a decrease in the services surplus of $0.6 billion to $19.4
billion.

Year-to-date, the goods and services deficit increased $21.1 billion, or 22.7 percent, from the
same period in 2017. Exports increased $22.4 billion or 5.9 percent. Imports increased $43.6 billion
or 9.1 percent.

Three-Month Moving Averages (exhibit 2)

The average goods and services deficit increased $2.2 billion to $56.1 billion for the three
months ending in February.
     * Average exports increased $1.4 billion to $203.0 billion in February.
     * Average imports increased $3.6 billion to $259.1 billion in February.

Year-over-year, the average goods and services deficit increased $10.1 billion from the three
months ending in February 2017.
     * Average exports increased $12.2 billion from February 2017.
     * Average imports increased $22.3 billion from February 2017.

Exports (exhibits 3, 6, and 7)

Exports of goods increased $3.0 billion to $137.2 billion in February.
  Exports of goods on a Census basis increased $3.1 billion.
     * Industrial supplies and materials increased $2.0 billion.
          o Nonmonetary gold increased $0.6 billion.
          o Crude oil increased $0.3 billion.
          o Natural gas increased $0.3 billion.
     * Automotive vehicles, parts, and engines increased $0.9 billion.
          o Passenger cars increased $0.7 billion.
     * Capital goods increased $0.7 billion.
          o Civilian aircraft increased $0.2 billion.
          o Drilling and oilfield equipment increased $0.2 billion.
     * Consumer goods decreased $0.8 billion.
          o Pharmaceutical preparations decreased $0.6 billion.
  Net balance of payments adjustments decreased $0.1 billion.

Exports of services increased $0.5 billion to $67.3 billion in February.
     * Transport increased $0.2 billion.
     * Travel (for all purposes including education) increased $0.1 billion.
     * Charges for the use of intellectual property increased $0.1 billion.

Imports (exhibits 4, 6, and 8)

Imports of goods increased $3.3 billion to $214.2 billion in February.
  Imports of goods on a Census basis increased $3.5 billion.
     * Capital goods increased $1.8 billion.
          o Civilian aircraft increased $0.5 billion.
          o Materials-handling equipment increased $0.3 billion.
          o Computers increased $0.3 billion.
     * Industrial supplies and materials increased $0.8 billion.
          o Crude oil increased $0.7 billion.
     * Foods, feeds, and beverages increased $0.8 billion.
  Net balance of payments adjustments decreased $0.2 billion.

Imports of services increased $1.1 billion to $47.8 billion in February.
     * The largest increase was in charges for the use of intellectual property ($1.0 billion).
       The increase reflects payments for the rights to broadcast the 2018 Winter Olympic Games.
     * The largest decrease was in travel (for all purposes including education) ($0.2 billion).

Real Goods in 2009 Dollars – Census Basis (exhibit 11)

The real goods deficit decreased $0.9 billion to $69.1 billion in February.
     * Real exports of goods increased $2.5 billion to $129.4 billion.
     * Real imports of goods increased $1.7 billion to $198.5 billion.

Revisions

Revisions to January exports
     * Exports of goods were revised down $0.1 billion.
     * Exports of services were revised up $0.1 billion.

Revisions to January imports
     * Imports of goods were revised up $0.1 billion.
     * Imports of services were revised down less than $0.1 billion.

Goods by Selected Countries and Areas: Monthly – Census Basis (exhibit 19)

The February figures show surpluses, in billions of dollars, with South and Central America
($3.4), Hong Kong ($3.1), Brazil ($0.9), United Kingdom ($0.6), and Singapore ($0.5). Deficits
were recorded, in billions of dollars, with China ($34.7), European Union ($15.3), Germany ($6.7),
Mexico ($6.6), Japan ($6.0), Italy ($2.8), OPEC ($2.3), India ($1.9), Taiwan ($1.5), France ($1.4),
South Korea ($1.1), Saudi Arabia ($0.4), and Canada ($0.4).

     * The deficit with Mexico increased $1.0 billion to $6.6 billion in February. Exports decreased
       less than $0.1 billion to $21.9 billion and imports increased $0.9 billion to $28.5 billion.
     * The deficit with Germany increased $0.4 billion to $6.7 billion in February. Exports decreased
       $0.2 billion to $4.7 billion and imports increased $0.2 billion to $11.3 billion.
     * The deficit with Canada decreased $1.2 billion to $0.4 billion in February. Exports increased
       $1.2 billion to $26.1 billion and imports increased less than $0.1 billion to $26.4 billion.

April 9, 2018 in Economics | Permalink | Comments (0)

Wednesday, April 4, 2018

The Brave New World of Artificial Intelligence

Artificial intelligence is a game-changer. It could boost global productivity from 0.8% to 1.4% a year. But with thorny issues like job automation and data privacy, does AI-spurred growth come at a cost?

The OECD has released a video exploring the issues of AI.

 



April 4, 2018 in Economics | Permalink | Comments (0)

Saturday, March 31, 2018

U.S. Net International Investment Position Fourth Quarter and Year 2017

Fourth Quarter 2017

The U.S. net international investment position decreased to -$7,845.8 billion (preliminary) at the end of the fourth quarter from -$7,739.7 billion (revised) at the end of the third quarter, according to statistics released by the Bureau of Economic Analysis (BEA). The $106.1 billion decrease reflected a $727.2 billion increase in U.S. assets and an $833.3 billion increase in U.S. liabilities (table 1).

The $106.1 billion decrease in the net investment position reflected net financial transactions of -$52.4 billion and net other changes in position, such as price and exchange-rate changes, of -$53.8 billion (table A).

The net investment position decreased 1.4 percent in the fourth quarter, compared with an increase of 3.3 percent in the third quarter. The net investment position decreased an average of 5.0 percent per quarter from the first quarter of 2011 through the second quarter of 2017.

U.S. assets increased $727.2 billion to $27,632.8 billion at the end of the fourth quarter, mostly reflecting increases in portfolio investment and direct investment assets.

  • Assets excluding financial derivatives increased $809.8 billion to $26,010.4 billion. The increase resulted from other changes in position of $658.8 billion and financial transactions of $151.0 billion (table A). Other changes in position mostly reflected (1) foreign equity price increases that raised the value of portfolio investment and direct investment equity assets and (2) the appreciation of major foreign currencies against the U.S. dollar that raised the value of foreign-currency-denominated assets in dollar terms. Financial transactions mostly reflected net acquisition of portfolio investment debt securities and direct investment equity assets.
  • Financial derivatives decreased $82.6 billion to $1,622.5 billion, mostly in single-currency interest rate contracts and foreign exchange contracts.
Table A. Quarterly Change in the U.S. Net International Investment PositionBillions of dollars, not seasonally adjusted
  Position, 2017:III Change in position in 2017:IV Position, 2017:IV
Total Attributable to:
Financial transactions Other changes in position 1
U.S. net international investment position -7,739.7 -106.1 -52.4 -53.8 -7,845.8
Net position excluding financial derivatives -7,773.5 -100.6 -53.2 -47.5 -7,874.1
Financial derivatives other than reserves, net 33.8 -5.5 0.8 -6.3 28.3
U.S. assets 26,905.6 727.2 (2) (2) 27,632.8
Assets excluding financial derivatives 25,200.5 809.8 151.0 658.8 26,010.4
Financial derivatives other than reserves 1,705.1 -82.6 (2) (2) 1,622.5
U.S. liabilities 34,645.3 833.3 (2) (2) 35,478.6
Liabilities excluding financial derivatives 32,974.0 910.5 204.2 706.3 33,884.4
Financial derivatives other than reserves 1,671.3 -77.1 (2) (2) 1,594.2
1 Disaggregation of other changes in position into price changes, exchange-rate changes, and other changes in volume and valuation is only presented for annual statistics released in June each year.
2 Financial transactions and other changes in financial derivatives positions are available only on a net basis; they are not separately available for U.S. assets and U.S. liabilities.

U.S. liabilities increased $833.3 billion to $35,478.6 billion at the end of the fourth quarter, mostly reflecting increases in portfolio investment and direct investment liabilities.

  • Liabilities excluding financial derivatives increased $910.5 billion to $33,884.4 billion. The increase resulted from other changes in position of $706.3 billion and financial transactions of $204.2 billion (table A). Other changes in position mostly reflected U.S. equity price increases that raised the value of portfolio investment and direct investment equity liabilities. Financial transactions reflected net incurrence of liabilities in all major investment categories.
  • Financial derivatives decreased $77.1 billion to $1,594.2 billion, mostly in single-currency interest rate contracts and foreign exchange contracts.

Updates to Statistics

Table B. Updates to Third Quarter 2017 International Investment Position AggregatesBillions of dollars, not seasonally adjusted
  Preliminary estimate Revised estimate
U.S. net international investment position -7,768.7 -7,739.7
  U.S. assets 26,854.9 26,905.6
    Direct investment at market value 8,580.6 8,595.4
    Portfolio investment 11,860.1 11,905.5
    Financial derivatives other than reserves 1,705.1 1,705.1
    Other investment 4,252.5 4,243.0
    Reserve assets 456.6 456.6
  U.S. liabilities 34,623.6 34,645.3
    Direct investment at market value 8,452.8 8,454.1
    Portfolio investment 19,043.2 19,057.9
    Financial derivatives other than reserves 1,671.3 1,671.3
    Other investment 5,456.2 5,461.9

Year 2017

The U.S. net international investment position increased to -$7,845.8 billion (preliminary) at the end of 2017 from -$8,318.4 billion at the end of 2016. The $472.6 billion increase reflected a $3,783.4 billion increase in U.S. assets and a $3,310.8 billion increase in U.S. liabilities.

U.S. assets increased $3,783.4 billion to $27,632.8 billion at the end of 2017, mostly reflecting increases in portfolio investment and direct investment assets that were partly offset by a decrease in financial derivatives.

  • Assets excluding financial derivatives increased $4,369.9 billion to $26,010.4 billion. The increase resulted from other changes in position of $3,157.5 billion and financial transactions of $1,212.4 billion (table C). Other changes in position mostly reflected (1) foreign equity price increases that raised the value of portfolio investment and direct investment equity assets and (2) the appreciation of major foreign currencies against the U.S. dollar that raised the value of foreign-currency-denominated assets in dollar terms. Financial transactions reflected net acquisition of assets in all major investment categories, except reserve assets.
  • Financial derivatives decreased $586.5 billion to $1,622.5 billion, mostly in single-currency interest rate contracts and foreign exchange contracts.
Table C. Annual Change in the U.S. Net International Investment PositionBillions of dollars
  Position, 2016 Change in position in 2017 Position, 2017
Total Attributable to:
Financial transactions Other changes in position 1
U.S. net international investment position -8,318.4 472.6 -349.2 821.8 -7,845.8
Net position excluding financial derivatives -8,379.7 505.6 -375.6 881.2 -7,874.1
Financial derivatives other than reserves, net 61.3 -33.0 26.4 -59.4 28.3
U.S. assets 23,849.4 3,783.4 (2) (2) 27,632.8
Assets excluding financial derivatives 21,640.5 4,369.9 1,212.4 3,157.5 26,010.4
Financial derivatives other than reserves 2,209.0 -586.5 (2) (2) 1,622.5
U.S. liabilities 32,167.8 3,310.8 (2) (2) 35,478.6
Liabilities excluding financial derivatives 30,020.1 3,864.3 1,587.9 2,276.4 33,884.4
Financial derivatives other than reserves 2,147.7 -553.5 (2) (2) 1,594.2
1Disaggregation of other changes in position into price changes, exchange-rate changes, and other changes in volume and valuation is only presented for annual statistics released in June each year.
2Financial transactions and other changes in financial derivatives positions are available only on a net basis; they are not separately available for U.S. assets and U.S. liabilities.

U.S. liabilities increased $3,310.8 billion to $35,478.6 billion at the end of 2017, mostly reflecting increases in portfolio investment and direct investment liabilities that were partly offset by a decrease in financial derivatives.

  • Liabilities excluding financial derivatives increased $3,864.3 billion to $33,884.4 billion. The increase resulted from other changes in position of $2,276.4 billion and financial transactions of $1,587.9 billion (table C). Other changes in position mostly reflected U.S. equity price increases that raised the value of portfolio investment and direct investment equity liabilities. Financial transactions reflected net incurrence of liabilities in all major investment categories.
  • Financial derivatives decreased $553.5 billion to $1,594.2 billion, mostly in single-currency interest rate contracts and foreign exchange contracts.

March 31, 2018 in Economics | Permalink | Comments (0)