International Financial Law Prof Blog

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

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)

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)

Thursday, March 29, 2018

USA personal income and outlays, February 2018

Personal income increased $67.3 billion (0.4 percent) in February according to estimates released today
by the Bureau of Economic Analysis. Disposable personal income (DPI) increased $53.9 billion (0.4 percent)
and personal consumption expenditures (PCE) increased $27.7 billion (0.2 percent).

Real DPI increased 0.2 percent in February and Real PCE increased less than 0.1 percent. The PCE price
index increased 0.2 percent. Excluding food and energy, the PCE price index increased 0.2 percent.

                                                         2017                  2018
                                                Oct.     Nov.     Dec.     Jan.     Feb.
                                                   Percent change from preceding month
Personal income:
 Current dollars                                0.4      0.3      0.4      0.4      0.4
Disposable personal income:
 Current dollars                                0.3      0.3      0.4      1.0      0.4
 Chained (2009) dollars                         0.1      0.1      0.2      0.6      0.2
Personal consumption expenditures (PCE):
 Current dollars                                0.3      0.7      0.5      0.2      0.2
 Chained (2009) dollars                         0.2      0.5      0.3     -0.2      0.0
Price indexes:
 PCE                                            0.2      0.2      0.1      0.4      0.2
 PCE, excluding food and energy                 0.2      0.1      0.2      0.3      0.2

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

The increase in personal income in February primarily reflected increases in wages and salaries and nonfarm
proprietors’ income (table 3).

The $1.4 billion increase in real PCE in February reflected an increase of $1.0 billion in spending for goods
and a $0.5 billion increase in spending for services (table 7). Within goods, recreational goods and vehicles
was the leading contributor to the increase. Within services, financial services and insurance was the leading
contributor to the increase. Detailed information on monthly real PCE spending can be found in Table 2.3.6U.

Personal outlays increased $27.8 billion in February (table 3). Personal saving was $497.4 billion in February and
the personal saving rate, personal saving as a percentage of disposable personal income, was 3.4 percent (table 1).

                                2017 Personal Income and Outlays

Personal income (table 6) increased 3.1 percent in 2017 (that is, from the 2016 annual level to the 2017 annual level),
compared with an increase of 2.4 percent in 2016. DPI increased 2.9 percent in 2017 compared with an increase of
2.6 percent in 2016. In 2017, PCE increased 4.5 percent, compared with an increase of 4.0 percent in 2016.

Real DPI increased 1.2 percent in 2017, compared with an increase of 1.4 percent in 2016. Real PCE (table 8) increased
2.8 percent, compared with an increase of 2.7 percent in 2016.

                                Updates to Personal Income and Outlays

Estimates have been updated for October through January. 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
                                               December                                   January
                                Previous   Revised   Previous   Revised   Previous   Revised   Previous   Revised
                               (Billions of dollars)      (Percent)      (Billions of dollars)      (Percent)
Personal income:
 Current dollars                    63.2      67.8        0.4       0.4       64.7      74.7        0.4       0.4
Disposable personal income:
 Current dollars                    52.2      56.4        0.4       0.4      134.8     142.7        0.9       1.0
 Chained (2009) dollars             27.4      31.5        0.2       0.2       71.0      75.7        0.6       0.6
Personal consumption expenditures:
 Current dollars                    53.1      62.7        0.4       0.5       31.2      21.3        0.2       0.2
 Chained (2009) dollars             29.3      38.1        0.2       0.3      -17.0     -27.7       -0.1      -0.2

                                Next release:  April 30, 2018 at 8:30 A.M. EDT
                                   Personal Income and Outlays:  March 2018

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

Wednesday, March 28, 2018

GDP for 2017: National Income, Corporate Profits, and Product Accounts Looking Strong

Real gross domestic product (GDP) increased at an annual rate of 2.9 percent in the fourth quarter of
2017 (table 1), according to the "third" estimate released by the Bureau of Economic Analysis. In the
third quarter, real GDP increased 3.2 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 2.5 percent.
With this third estimate for the fourth quarter, the general picture of economic growth remains the
same; personal consumption expenditures (PCE) and private inventory investment were revised up (see
"Updates to GDP" on page 2).

 
Real GDP: Percent Change from Preceding Quarter
Real gross domestic income (GDI) increased 0.9 percent in the fourth quarter, compared with an
increase of 2.4 percent in the third. The average of real GDP and real GDI, a supplemental measure of
U.S. economic activity that equally weights GDP and GDI, increased 1.9 percent in the fourth quarter,
compared with an increase of 2.8 percent in the third quarter (table 1).
The increase in real GDP in the fourth quarter primarily reflected positive contributions from PCE,
nonresidential fixed investment, exports, residential fixed investment, state and local government
spending, and federal government spending that were partly offset by a negative contribution from
private inventory investment. Imports, which are a subtraction in the calculation of GDP, increased
(table 2).

The deceleration in real GDP growth in the fourth quarter reflected a downturn in private inventory
investment that was partly offset by accelerations in PCE, exports, state and local government spending,
nonresidential fixed investment, and federal government spending, and an upturn in residential fixed
investment. Imports, which are a subtraction in the calculation of GDP, turned up.

Current-dollar GDP increased 5.3 percent, or $253.5 billion, in the fourth quarter to a level of $19,754.1
billion. In the third quarter, current-dollar GDP increased 5.3 percent, or $250.6 billion (table 1 and table
3).

The price index for gross domestic purchases increased 2.5 percent in the fourth quarter, compared
with an increase of 1.7 percent in the third quarter (table 4). The PCE price index increased 2.7 percent,
compared with an increase of 1.5 percent. Excluding food and energy prices, the PCE price index
increased 1.9 percent, compared with an increase of 1.3 percent (appendix table A).


Updates to GDP

The upward revision to the percent change in real GDP reflected upward revisions to PCE and private
inventory 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     Third Estimate
                                                   (Percent change from preceding quarter)
Real GDP                                         2.6                 2.5                2.9
Current-dollar GDP                               5.0                 4.9                5.3
Real GDI                                         ...                 ...                0.9
Average of Real GDP and Real GDI                 ...                 ...                1.9
Gross domestic purchases price index             2.5                 2.5                2.5
PCE price index                                  2.8                 2.7                2.7


2017 GDP

Real GDP increased 2.3 percent in 2017 (that is, from the 2016 annual level to the 2017 annual level),
compared with an increase of 1.5 percent in 2016 (table 1).

The increase in real GDP in 2017 primarily reflected positive contributions from PCE, nonresidential fixed
investment, and exports. These contributions were partly offset by a decline in private inventory
investment. Imports, which are a subtraction in the calculation of GDP, increased (table 2).

The acceleration in real GDP from 2016 to 2017 reflected upturns in nonresidential fixed investment and
in exports and a smaller decrease in private inventory investment.  These movements were partly offset
by decelerations in residential fixed investment and in state and local government spending. Imports,
which are a subtraction in the calculation of GDP, accelerated.

Current-dollar GDP increased 4.1 percent, or $766.1 billion, in 2017 to a level of $19,390.6 billion,
compared with an increase of 2.8 percent, or $503.8 billion, in 2016 (table 1 and table 3).

The price index for gross domestic purchases increased 1.8 percent in 2017, compared with an increase
of 1.0 percent in 2016 (table 4). The PCE price index increased 1.7 percent, compared with an increase
of 1.2 percent. Excluding food and energy prices, the PCE price index increased 1.5 percent, compared
with an increase of 1.8 percent (appendix table A).

During 2017 (measured from the fourth quarter of 2016 to the fourth quarter of 2017), real GDP
increased 2.6 percent, compared with an increase of 1.8 percent during 2016.  The price index for gross
domestic purchases increased 1.9 percent during 2017, compared with an increase of 1.4 percent during
2016 (table 7).


Corporate Profits (table 12)

Profits from current production (corporate profits with inventory valuation adjustment and capital
consumption adjustment) decreased $1.1 billion in the fourth quarter, in contrast to an increase of
$90.2 billion in the third quarter.

Profits of domestic financial corporations decreased $14.6 billion in the fourth quarter, in contrast to
an increase of $47.8 billion in the third. Profits of domestic nonfinancial corporations increased $19.4
billion, compared with an increase of $10.4 billion. Rest-of-the-world  profits decreased $5.9 billion, in
contrast to an increase of $32.0 billion. In the fourth quarter, receipts increased $14.9 billion, and
payments increased $20.8 billion.

In 2017, profits from current production increased $91.2 billion, in contrast to a decrease of $44.0
billion in 2016. Profits of domestic financial corporations increased $15.7 billion, in contrast to a
decrease of $2.0 billion. Profits of domestic nonfinancial corporations increased $37.4 billion, in contrast
to a decrease of $51.7 billion. The rest-of-the-world component of profits increased $38.0 billion,
compared with an increase of $9.8 billion.


The 2017 Tax Cuts and Jobs Act includes several provisions that impact the business income and
personal income statistics in the national income and product accounts (NIPAs). The provisions do not
impact corporate profits for current production or GDI but do impact net cash flow in the fourth quarter
of 2017. For more information, see the Technical Note.

March 28, 2018 in Economics | Permalink | Comments (0)

Sunday, March 25, 2018

U.S. International Transactions: Fourth Quarter and Year 2017

The U.S. current-account deficit increased to $128.2 billion (preliminary) in the fourth
quarter of 2017 from $101.5 billion (revised) in the third quarter, according to statistics
released by the Bureau of Economic Analysis (BEA). The deficit was 2.6 percent of current-
dollar gross domestic product (GDP) in the fourth quarter, up from 2.1 percent in the third
quarter.

Quarterly U.S. Current-Account and Component Balance

The $26.7 billion increase in the current-account deficit mostly reflected increases in the
deficits on goods and secondary income and a decrease in the surplus on primary income.

                  Current-Account Transactions, Fourth Quarter (tables 1-5)

Exports of goods and services and income receipts

Exports of goods and services and income receipts increased $16.6 billion in the fourth quarter
to $878.8 billion.

    * Goods exports increased $14.2 billion to $400.7 billion, mostly reflecting an increase
      in industrial supplies and materials, primarily petroleum and products.

    * Primary income receipts increased $6.0 billion to $243.9 billion, mostly reflecting
      increases in direct investment income and in portfolio investment income.

    * Secondary income receipts decreased $5.9 billion to $35.3 billion, partly offsetting the
      increases in goods exports and in primary income receipts. The decrease in secondary
      income receipts mostly reflected a decrease in U.S. government transfers, primarily fines
      and penalties.

Quarterly U.S. Current-Account Transactions

Imports of goods and services and income payments

Imports of goods and services and income payments increased $43.3 billion to $1,006.9 billion.

    * Goods imports increased $33.1 billion to $614.9 billion, mostly reflecting increases in
      industrial supplies and materials, primarily petroleum and products, and in consumer
      goods except food and automotive.

    * Primary income payments increased $7.3 billion to $186.7 billion, primarily reflecting an
      increase in direct investment income.

                          Capital Account, Fourth Quarter (table 1)

The balance on the capital account shifted to a deficit of less than $0.1 billion in the fourth
quarter from a surplus of $24.9 billion in the third quarter. The third-quarter transactions
reflected receipts from foreign insurance companies for losses resulting from hurricanes Harvey,
Irma, and Maria. For more information, see “What are the effects of hurricanes and other disasters 
on the international economic accounts?”

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

Net U.S. borrowing measured by financial-account transactions was $29.8 billion in the fourth
quarter, a decrease from net borrowing of $121.8 billion in the third quarter.

Financial assets

Net U.S. acquisition of financial assets excluding financial derivatives decreased $172.8
billion to $177.9 billion.

    * Net U.S. acquisition of portfolio investment assets decreased $95.9 billion to $83.3
      billion, reflecting a shift to net U.S. sales of foreign equity and investment fund
      shares from third-quarter net purchases.

    * Transactions in other investment assets shifted to net U.S. liquidation of $10.7 billion
      in the fourth quarter from net acquisition of $74.7 billion in the third quarter, mostly
      reflecting a shift to net foreign repayment of loans from third-quarter net U.S.
      provision of loans to foreigners.

Liabilities

Net U.S. incurrence of liabilities excluding financial derivatives decreased $282.6 billion to
$208.4 billion.

    * Net U.S. incurrence of portfolio investment liabilities decreased $211.5 billion to $84.9
      billion, reflecting a decrease in net foreign purchases of U.S. long-term debt securities
      and a shift to net foreign sales of U.S. equity and investment fund shares from third-
      quarter net foreign purchases.

    * Net U.S. incurrence of direct investment liabilities decreased $49.6 billion to $54.1
      billion, primarily reflecting a shift to net U.S. repayment of debt instrument
      liabilities from third-quarter net incurrence.

    * Net U.S. incurrence of other investment liabilities decreased $21.4 billion to $69.5
      billion, reflecting largely offsetting changes in transactions in loan and deposit
      liabilities. In loans, transactions shifted to net U.S. repayment of loan liabilities
      from third-quarter net incurrence. In deposits, transactions shifted to net incurrence of
      deposit liabilities from third-quarter net foreign withdrawal of deposits in the United
      States.


Financial derivatives

Transactions in financial derivatives other than reserves reflected fourth-quarter net lending
of $0.8 billion, a decrease of $17.8 billion from the third quarter.

                      Statistical Discrepancy, Fourth Quarter (table 1)

The statistical discrepancy was $98.4 billion in the fourth quarter, after a statistical
discrepancy of -$45.2 billion in the third quarter.

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

                                                      Preliminary estimate    Revised estimate


Current-account balance                                       -100.6               -101.5
Goods balance                                                 -195.3               -195.3
   Services balance                                             60.9                 60.0
   Primary-income balance                                       57.0                 58.5
   Secondary-income balance                                    -23.2                -24.7
Net lending (+)/borrowing (-) from
   financial-account transactions                             -105.6               -121.8
Statistical discrepancy                                        -29.9                -45.2

                             Current-Account Balance, Year 2017

The current-account deficit increased to $466.2 billion (preliminary) in 2017 from $451.7
billion in 2016.  The deficit was 2.4 percent of current-dollar GDP in 2017, the same
percentage as in 2016.

The $14.6 billion increase in the deficit reflected a $58.7 billion increase in the deficit on
goods and a $4.9 billion decrease in the surplus on services that were partly offset by a $43.8
billion increase in the surplus on primary income and a $5.3 billion decrease in the deficit on
secondary income.

                    Current-Account Transactions, Year 2017 (tables 1-5)

Exports of goods and services and income receipts

Exports of goods and services and income receipts increased $250.9 billion in 2017 to $3,408.2
billion.

    * Primary income receipts increased $112.9 billion to $926.9 billion, led by an increase in
      direct investment income.

    * Goods exports increased $95.0 billion to $1,550.7 billion, led by an increase in
      industrial supplies and materials.

    * Services exports increased $28.5 billion to $780.9 billion, led by increases in other
      business services and in financial services.

Imports of goods and services and income payments

Imports of goods and services and income payments increased $265.5 billion to $3,874.4 billion.

    * Goods imports increased $153.7 billion to $2,361.9 billion, led by increases in
      industrial supplies and materials and in capital goods except automotive.

    * Primary income payments increased $69.1 billion to $709.9 billion, led by increases in
      portfolio investment income and in other investment income.

    * Services imports increased $33.5 billion to $538.1 billion, led by increases in travel
      (for all purposes including education) and in other business services.

                             Capital Account, Year 2017 (table 1)

Capital transfer receipts were $24.9 billion in 2017. The transactions reflected receipts from
foreign insurance companies for losses resulting from hurricanes Harvey, Irma, and Maria. For
more information, see “What are the effects of hurricanes and other disasters on the
international economic accounts?"

                     Financial Account, Year 2017 (tables 1, 6, 7, and 8)

Net U.S. borrowing measured by financial-account transactions was $349.2 billion in 2017, a
decrease from net borrowing of $377.7 billion in 2016.

Financial assets

Net U.S. acquisition of financial assets excluding financial derivatives increased $864.5
billion to $1,212.4 billion.

    * Net U.S. acquisition of portfolio investment assets increased $548.9 billion to $589.5
      billion, reflecting increases in net U.S. purchases of foreign debt securities and in net
      purchases of foreign equity and investment fund shares.

    * Transactions in other investment assets shifted to net U.S. acquisition of $200.1 billion
      in 2017 from net liquidation of $6.4 billion in 2016, primarily reflecting a shift to net
      U.S. acquisition of foreign deposits in 2017 from net withdrawal in 2016.

    * Net U.S. acquisition of direct investment assets increased $112.8 billion to $424.4
      billion, reflecting a shift to net U.S. acquisition of debt instruments in 2017 from net
      foreign repayment in 2016 and an increase in net acquisition of equity assets.

Liabilities

Net U.S. incurrence of liabilities excluding financial derivatives increased $846.5 billion to
$1,587.9 billion.

    * Net U.S. incurrence of portfolio investment liabilities increased $599.7 billion to
      $837.1 billion, reflecting a shift to net foreign purchases of U.S. equity and investment
      fund shares in 2017 from net foreign sales in 2016 and an increase in net foreign
      purchases of U.S. long-term debt securities.

    * Net U.S. incurrence of other investment liabilities increased $377.6 billion to $402.2
      billion, reflecting a shift to net U.S. incurrence of deposit liabilities in 2017 from
      net foreign withdrawal in 2016 and a shift to net U.S. incurrence of loan liabilities in
      2017 from net repayment in 2016.

    * Net U.S. incurrence of direct investment liabilities decreased $130.7 billion to $348.7
      billion, partly offsetting the increases in net U.S. incurrence of portfolio investment
      liabilities and other investment liabilities. The decrease in net U.S. incurrence of
      direct investment liabilities reflected decreases in net incurrence of debt instrument
      liabilities and equity liabilities.

Financial derivatives

Transactions in financial derivatives other than reserves reflected net lending of $26.4
billion in 2017, an increase of $10.5 billion from 2016.

March 25, 2018 in Economics | Permalink | Comments (0)

Friday, March 16, 2018

Initial Estimates Show Digital Economy Accounted for 6.5 Percent of GDP in 2016

The Bureau of Economic Analysis released, for the first time, preliminary statistics and an accompanying report exploring the size and growth of the digital economy. Goods and services that are primarily digital accounted for 6.5 percent of the U.S. economy, or $1.2 trillion, in 2016, after a decade of growing faster than the U.S. economy overall, BEA’s research shows.

From 2006 to 2016, the digital economy grew at an average annual rate of 5.6 percent, outpacing overall U.S. economic growth of 1.5 percent per year.

In 2016, the digital economy supported 5.9 million jobs, or 3.9 percent of total U.S. employment. Digital economy employees earned $114,275 in average annual compensation compared with $66,498 per worker for the total U.S. economy.

BEA includes in its definition of the digital economy three major types of goods and services:

  • the digital-enabling infrastructure needed for an interconnected computer network to exist and operate
  • the e-commerce transactions that take place using that system
  • digital media, which is the content that digital economy users create and access.

Under this definition, that includes goods and services, such as computer hardware and software, telecommunications services, margins on retail e-commerce transactions, and subscriptions to online streaming services, to name a few.

Because of the limitations of available data, the estimates released today include only goods and services that are “primarily digital.” This means that some components of the digital economy, like peer-to-peer (P2P) e-commerce, also known as the sharing economy, are excluded from the initial estimates. P2P transactions such as ride-sharing services rely on internet-enabled devices to match supply and demand, but also have a non-digital component of in-person provision of services.

These new estimates are supported in part by funding from the Commerce Department’s National Information and Telecommunications How-big-is-the-digital-economyAdministration. The estimates pull out information about the digital economy already embedded in BEA’s core statistics, such as GDP, and are the first step toward a future digital economy satellite account. Satellite accounts, like those for outdoor recreation or arts and culture, complement BEA’s core statistics by focusing on a specific industry or activity.

You can find the report and the data on the digital economy page at bea.gov. To submit comments or feedback or to ask a question about these new estimates, email DigitalEconomy@bea.gov. Feedback will help BEA refine and expand the digital economy estimates moving forward.

Frequently Asked Questions (FAQs)

March 16, 2018 in Economics | Permalink | Comments (0)

Thursday, March 8, 2018

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

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced that the goods
and services deficit was $56.6 billion in January, up $2.7 billion from $53.9 billion in December,
revised.

Goods and Services Trade Deficit

Exports, Imports, and Balance (exhibit 1)

January exports were $200.9 billion, $2.7 billion less than December exports. January imports
were $257.5 billion, down less than $0.1 billion from December imports.

The January increase in the goods and services deficit reflected an increase in the goods deficit
of $2.8 billion to $76.5 billion and an increase in the services surplus of $0.1 billion to
$19.9 billion.

Year-over-year, the goods and services deficit increased $7.9 billion, or 16.2 percent, from
January 2017. Exports increased $9.7 billion or 5.1 percent. Imports increased $17.6 billion or
7.4 percent.

Three-Month Moving Averages (exhibit 2)

The average goods and services deficit increased $2.5 billion to $53.8 billion for the three
months ending in January.
     * Average exports increased $1.7 billion to $201.6 billion in January.
     * Average imports increased $4.2 billion to $255.4 billion in January.

Year-over-year, the average goods and services deficit increased $7.2 billion from the three
months ending in January 2017.
     * Average exports increased $13.1 billion from January 2017.
     * Average imports increased $20.3 billion from January 2017.

Exports (exhibits 3, 6, and 7)

Exports of goods decreased $3.0 billion to $134.2 billion in January.
  Exports of goods on a Census basis decreased $3.3 billion.
     * Capital goods decreased $2.6 billion.
          o Civilian aircraft decreased $1.8 billion.
     * Industrial supplies and materials decreased $1.3 billion.
          o Fuel oil decreased $0.5 billion.
          o Crude oil decreased $0.2 billion.
          o Other chemicals decreased $0.2 billion.
     * Other goods decreased $1.0 billion.
     * Consumer goods increased $1.2 billion.
          o Artwork, antiques, stamps, and other collectibles increased $0.5 billion.
          o Pharmaceutical preparations increased $0.4 billion.
  Net balance of payments adjustments increased $0.3 billion.

Exports of services increased $0.3 billion to $66.7 billion in January.
     * The largest increase was in charges for the use of intellectual property ($0.1 billion).
     * The only decrease was in maintenance and repair services ($0.1 billion).

Imports (exhibits 4, 6, and 8)

Imports of goods decreased $0.2 billion to $210.7 billion in January.
  Imports of goods on a Census basis decreased $0.3 billion.
     * Capital goods decreased $1.3 billion.
          o Civilian aircraft decreased $0.9 billion.
          o Semiconductors decreased $0.5 billion.
     * Consumer goods decreased $0.9 billion.
          o Cell phones and other household goods decreased $1.2 billion.
     * Industrial supplies and materials increased $2.0 billion.
          o Crude oil increased $2.2 billion.
  Net balance of payments adjustments increased $0.2 billion.

Imports of services increased $0.2 billion to $46.8 billion in January.
     * The largest increase was in other business services ($0.2 billion).
     * 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 increased $1.3 billion to $69.7 billion in January.
     * Real exports of goods decreased $4.3 billion to $126.9 billion.
     * Real imports of goods decreased $3.0 billion to $196.6 billion.

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

Friday, March 2, 2018

National Income and Product Accounts Gross Domestic Product: Fourth Quarter and Annual 2017 (Second Estimate)

Real gross domestic product (GDP) increased at an annual rate of 2.5 percent in the fourth quarter of
2017 (table 1), according to the "second" estimate released by the Bureau of Economic Analysis. In the
third quarter, real GDP increased 3.2 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 2.6
percent. With this second estimate for the fourth quarter, the general picture of economic growth
remains the same.

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

The deceleration in real GDP growth in the fourth quarter reflected a downturn in private inventory
investment that was partly offset by accelerations in PCE, exports, state and local government spending,
nonresidential fixed investment, and federal government spending, and an upturn in residential fixed
investment. Imports, which are a subtraction in the calculation of GDP, turned up.

Current-dollar GDP increased 4.9 percent, or $235.9 billion, in the fourth quarter to a level of $19,736.5
billion. In the third quarter, current-dollar GDP increased 5.3 percent, or $250.6 billion (table 1 and table
3).

The price index for gross domestic purchases increased 2.5 percent in the fourth quarter, compared
with an increase of 1.7 percent in the third quarter (table 4). The PCE price index increased 2.7 percent,
compared with an increase of 1.5 percent. Excluding food and energy prices, the PCE price index
increased 1.9 percent, compared with an increase of 1.3 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 a slight downward revision to private inventory 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                                       2.6             2.5
Current-dollar GDP                             5.0             4.9
Gross domestic purchases price index           2.5             2.5
PCE price index                                2.8             2.7


2017 GDP

Real GDP increased 2.3 percent in 2017 (that is, from the 2016 annual level to the 2017 annual level),
compared with an increase of 1.5 percent in 2016 (table 1).

The increase in real GDP in 2017 primarily reflected positive contributions from PCE, nonresidential fixed
investment, and exports. These contributions were partly offset by a decline in private inventory
investment. Imports, which are a subtraction in the calculation of GDP, increased (table 2).

The acceleration in real GDP from 2016 to 2017 reflected upturns in nonresidential fixed investment and
in exports and a smaller decrease in private inventory investment.  These movements were partly offset
by decelerations in residential fixed investment and in state and local government spending. Imports,
which are a subtraction in the calculation of GDP, accelerated.

Current-dollar GDP increased 4.1 percent, or $761.7 billion, in 2017 to a level of $19,386.2 billion,
compared with an increase of 2.8 percent, or $503.8 billion, in 2016 (table 1 and table 3).

The price index for gross domestic purchases increased 1.8 percent in 2017, compared with an increase
of 1.0 percent in 2016 (table 4). The PCE price index increased 1.7 percent, compared with an increase
of 1.2 percent. Excluding food and energy prices, the PCE price index increased 1.5 percent, compared
with an increase of 1.8 percent (appendix table A).

During 2017 (measured from the fourth quarter of 2016 to the fourth quarter of 2017), real GDP
increased 2.5 percent, compared with an increase of 1.8 percent during 2016.  The price index for gross
domestic purchases increased 1.9 percent during 2017, compared with an increase of 1.4 percent during
2016 (table 7).


March 2, 2018 in Economics | Permalink | Comments (0)