International Financial Law Prof Blog

OECD Corporate Tax Statistics launch today

Tax systems worldwide are converging towards lower corporate tax rates. At the same time, the scale of base erosion and profit shifting is significant, and continues affecting the durability of the corporate tax base.

How do corporate tax levels compare across countries? What factors are driving the variation in corporate tax burdens seen worldwide? How important are corporate tax revenues as a percentage of total revenues, on a country-by-country basis?

A new OECD report and dataset to be published on Tuesday 15 January provides internationally comparable statistics and analysis designed to inform the tax policy debate.

Corporate Tax Statistics provides internationally comparable data on corporate tax revenues, statutory corporate income tax rates, corporate effective tax rates and tax incentives related to innovation.

The database is intended to assist in the study of corporate tax policy and expand the quality and range of statistical information available for analysis under the OECD/G20 Base Erosion and Profit Shifting (BEPS) initiative. Future editions will also include an important new data source – aggregated and anonymised statistics of data collected under country-by-country reporting now being implemented under BEPS Action 13.

The publication and data will be freely accessible to accredited journalists on the OECD’s password-protected website from 11:00 a.m. CET on Tuesday 15 January.

USA Personal Income and Outlays, November 2018

Personal income increased $40.2 billion (0.2 percent) in November according to estimates released today by the Bureau of Economic Analysis. Disposable personal income (DPI) increased $37.8 billion (0.2 percent) and personal consumption expenditures (PCE) increased $54.4 billion (0.4 percent).

Real DPI increased 0.2 percent in November and real PCE increased 0.3 percent. The PCE price index increased 0.1 percent. Excluding food and energy, the PCE price index increased 0.1 percent.

	2018
	July	Aug.	Sept.	Oct.	Nov.
	Percent change from preceding month
Personal income:
Current dollars	0.4	0.4	0.2	0.5	0.2
Disposable personal income:
Current dollars	0.3	0.4	0.2	0.5	0.2
Chained (2012) dollars	0.2	0.3	0.1	0.3	0.2
Personal consumption expenditures (PCE):
Current dollars	0.5	0.4	0.1	0.8	0.4
Chained (2012) dollars	0.3	0.3	0.0	0.6	0.3
Price indexes:
PCE	0.1	0.1	0.1	0.2	0.1
PCE, excluding food and energy	0.2	0.0	0.2	0.1	0.1
Price indexes:	Percent change from month one year ago
PCE	2.4	2.2	2.0	2.0	1.8
PCE, excluding food and energy	2.0	1.9	2.0	1.8	1.9

The increase in personal income in November primarily reflected increases in wages and salaries and in farm proprietors’ income (table 3) that were partially offset by decreases in personal dividend income and social security benefits. Farm proprietors’ income increased $14.9 billion in November, which included subsidy payments associated with the Department of Agriculture’s Market Facilitation Program.

The $42.5 billion increase in real PCE in November reflected an increase of $32.6 billion in spending for goods and a $13.2 billion increase in spending for services (table 7). Within goods, recreational goods and vehicles was the leading contributor to the increase. Within services, the largest contributor to the increase was spending for household electricity and gas. Detailed information on monthly real PCE spending can be found in Table 2.3.6U.

Personal outlays increased $56.6 billion in November (table 3). Personal saving was $944.2 billion in November and the personal saving rate, personal saving as a percentage of disposable personal income, was 6.0 percent (table 1).

Updates to Personal Income and Outlays

Estimates have been updated for July through October. The percent change from the preceding month for current-dollar personal income, and for current-dollar and chained (2012) dollar DPI and PCE -- revised and previously published in last month's release -- are shown below.

	Change from preceding month
	September				October
	Previous	Revised	Previous	Revised	Previous	Revised	Previous	Revised
	(Billions of dollars)		(Percent)		(Billions of dollars)		(Percent)
Personal income:
Current dollars	40.2	39.4	0.2	0.2	84.9	88.0	0.5	0.5
Disposable personal income:
Current dollars	32.2	31.3	0.2	0.2	81.7	83.6	0.5	0.5
Chained (2012) dollars	11.8	10.2	0.1	0.1	49.2	49.0	0.3	0.3
Personal consumption expenditures:
Current dollars	31.5	17.7	0.2	0.1	86.9	108.7	0.6	0.8
Chained (2012) dollars	12.9	-0.5	0.1	0.0	56.5	74.9	0.4	0.6

Personal Income and Outlays Release Dates for 2019

December 2018….	January 31	April 2019….	May 31	August 2019….	September 27
January 2019….	March 1	May 2019….	June 28	September 2019….	October 31
February 2019….	March 29	June 2019….	July 30	October 2019….	November 27
March 2019.…	April 29	July 2019….	August 30	November 2019….	December 20

Next release:  January 31, 2019 at 8:30 A.M. EST

Personal Income and Outlays: December 2018

Gross Domestic Product, 3rd quarter 2018 (third estimate); Corporate Profits, 3rd quarter 2018

Real gross domestic product (GDP) increased at an annual rate of 3.4 percent in the third quarter of 2018 (table 1), according to the "third" estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 4.2 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 3.5 percent. With this third estimate for the third quarter, personal consumption expenditures (PCE) and exports were revised down, and private inventory investment was revised up; the general picture of economic growth remains the same (see "Updates to GDP" on page 2).

Real gross domestic income (GDI) increased 4.3 percent in the third quarter, compared with an increase of 0.9 percent in the second quarter. The average of real GDP and real GDI, a supplemental measure of U.S. economic activity that equally weights GDP and GDI, increased 3.8 percent in the third quarter, compared with an increase of 2.5 percent in the second quarter (table 1).

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

The deceleration in real GDP growth in the third quarter primarily reflected a downturn in exports and decelerations in nonresidential fixed investment and in PCE. Imports increased in the third quarter after decreasing in the second. These movements were partly offset by an upturn in private inventory investment.

Current-dollar GDP increased 4.9 percent, or $246.3 billion, in the third quarter to a level of $20.66 trillion. In the second quarter, current-dollar GDP increased 7.6 percent, or $370.9 billion (table 1 and table 3).

The price index for gross domestic purchases increased 1.8 percent in the third quarter, compared with an increase of 2.4 percent in the second quarter (table 4). The PCE price index increased 1.6 percent, compared with an increase of 2.0 percent. Excluding food and energy prices, the PCE price index increased 1.6 percent, compared with an increase of 2.1 percent.

Updates to GDP

The third-quarter percent change in real GDP was revised down 0.1 percentage point from the second estimate, reflecting downward revisions to PCE and exports that were partly offset by an upward 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	Third Estimate
	(Percent change from preceding quarter)
Real GDP	3.5	3.5	3.4
Current-dollar GDP	4.9	5.0	4.9
Real GDI	…	4.0	4.3
Average of Real GDP and Real GDI	…	3.8	3.8
Gross domestic purchases price index	1.7	1.7	1.8
PCE price index	1.6	1.5	1.6

Corporate Profits (table 10)

Profits from current production (corporate profits with inventory valuation and capital consumption adjustments) increased $78.2 billion in the third quarter, compared with an increase of $65.0 billion in the second quarter.

Profits of domestic financial corporations decreased $6.1 billion in the third quarter, in contrast to an increase of $16.5 billion in the second quarter. Profits of domestic nonfinancial corporations increased $83.0 billion, compared with an increase of $53.0 billion. Rest-of-the-world  profits increased $1.3 billion, in contrast to a decrease of $4.5 billion. In the third quarter, receipts decreased $9.5 billion, and payments decreased $10.8 billion.

*          *          *

Next release, January 30, 2019 at 8:30 A.M. EST
Gross Domestic Product, Fourth Quarter and Annual 2018 (Advance Estimate)

How does the 2017 Tax Cuts and Jobs Act affect BEA's business income statistics?

The 2017 Tax Cuts and Jobs Act includes several provisions that impact the business income statistics in the national income and product accounts (NIPAs), including corporate taxes and capital transfers.  Major provisions are highlighted below.

One-time Deemed Repatriation Tax on Accumulated Foreign Earnings

A one-time deemed repatriation tax is imposed on foreign earnings accumulated after 1986 until the end of a company's most recent fiscal year.  Under this provision, accumulated foreign earnings are deemed repatriated whether or not they are actually repatriated.  The tax rate is 15.5 percent on earnings held in cash and cash equivalents and 8.0 percent on earnings held in illiquid assets. Parent corporations may elect to pay this tax in prescribed installments over a period of eight years.

In the NIPAs, the deemed repatriation tax is classified as a capital transfer from business to government and recorded on an accrual basis in the fourth quarter of 2017 (Lines 2 and 35 of NIPA table 5.11U. Capital Transfers Paid and Received, by Sector and by Type.)  This tax is classified as a capital transaction because the tax applies to previously accumulated earnings and is not related to current period production. It is effectively a wealth tax in economic accounting terms. The one-time capital transfer affects net lending/borrowing of business and government, resulting in a redistribution of net worth from business to government but not affecting any measures in the current accounts.

BEA's estimate of the one-time repatriation tax is $250 billion at a quarterly rate ($1 trillion at an annual rate) and will be recorded (in its entirety) on an accrual basis in the fourth quarter of 2017.  This estimate was based on analysis of data from BEA's international transactions accounts (ITAs), international investment position (IIP), and activities of multinational enterprises (AMNE), as well as estimates from the Joint Committee on Taxation (JCT), and the Treasury Department's Office of Tax Analysis (OTA). This estimate may be updated as source data become available from the IRS Statistics of Income (SOI) reports. The SOI data are available on a two-year lag and will reflect the tax payments on a cash basis.

Decrease in Corporate Tax Rates

The tax law also changes the nominal domestic corporate tax rate from 35 percent to 21 percent beginning with the first quarter of 2018.  This will reduce the amount of taxes paid by corporations and received by the government.  This will not affect Gross Domestic Income (GDI) because profits before tax is the featured measure included in GDI.

Actual amounts of taxes paid by industry will be available in the SOI data with a two-year lag.  Until SOI data are available, estimates of corporate taxes are based on extrapolations that will be adjusted to reflect the new tax rates.   Estimates made for taxes will be replaced with SOI source data once they are available.

Taxation of U.S. Multinational Companies

For U.S. multinational companies, the tax law moves the tax system from a worldwide system to a modified territorial tax system. Under the worldwide system, companies were effectively taxed on all profits overseas at the statutory U.S. corporate tax rate.  These taxes, however, were deferred until the profits were repatriated and brought back to the United States.  In the NIPAs, repatriated profits are classified as dividends from the rest of the world.

Under the new modified territorial system, companies are no longer taxed on funds that are repatriated back to the United States, but they are potentially subject to new taxes. The Global Intangible Low-Taxed Income tax (GILTI) is a minimum tax on the excess income of foreign subsidiaries over a 10 percent rate of return on tangible business assets. The Base Erosion Anti-Abuse Tax (BEAT) is effectively an alternative minimum tax applied to companies with excessive interest or services payments to related parties.

These new taxes will be recorded in the NIPA's as taxes on corporate income beginning with the first quarter of 2018. The amounts of the taxes will be captured in the source data for corporate taxes from SOI reports. For time periods before SOI data are available, BEA will estimate these news taxes based on estimates from the JCT.

Estimates of taxes on corporate income can be found on line 16 of NIPA table 1.10. Gross Domestic Income by Type of Income.

TCJA International Tax Reform Impact: How are the International Transactions Accounts affected by an increase in direct investment dividend receipts?

In the international transactions accounts, income on equity, or earnings, of foreign affiliates of U.S. multinational enterprises in a period consists of a portion that is repatriated to the parent company in the United States in the form of dividends and a portion that is reinvested in foreign affiliates. At times, repatriation of dividends exceeds current-period earnings, resulting in negative values being recorded for reinvested earnings. For the first half of 2018, dividends exceeded earnings, reflecting the repatriation of accumulated prior earnings by foreign affiliates of U.S. multinational enterprises to their parent companies in the United States in response to the 2017 Tax Cuts and Jobs Act (TCJA), which generally eliminates taxes on repatriated earnings. The negative reinvested earnings in the first half of 2018 reflect the fact that U.S. parent companies withdrew accumulated prior earnings from their foreign affiliates. Preliminary statistics for the third quarter show positive reinvested earnings and lower dividends (see table below). The reinvested earnings are also reflected in the net acquisition of direct investment assets in the financial account, which was $76.8 billion in the third quarter and −$207.4 billion in the first half of 2018 (table 6).

An increase in the amount of direct investment income repatriated as dividends will have little effect on the current or financial account balances of the U.S. International Transactions Accounts (ITAs). For each account, the net effect is limited to a small change related to foreign taxes withheld on the increased dividends. Much larger, nearly offsetting flows are spread across several different components of the accounts.  

Direct investment income receipts recorded in the ITAs consist of U.S. parent companies’ share of the income on equity, or earnings, of their foreign affiliates, plus interest received on debt claims (ITA table 4.1, lines 2 - 9). Earnings are the economic profits of the foreign affiliate. They can be distributed to the U.S. parent company as dividends or reinvested in the foreign affiliate. Therefore, reinvested earnings are the residual of a given period’s earnings less any dividends paid to the U.S. parent company. That is, payment of dividends affects only the form in which direct investment income is received—as distributed or undistributed earnings—and not the total amount. When dividends exceed a given period’s earnings, reinvested earnings are negative, which indicates that dividends are being paid out of accumulated prior earnings. An increase in direct investment dividends, for a given level of earnings, will result in an offsetting decrease in reinvested earnings. Therefore, the only effect on the current account balance is a small decrease related to more foreign taxes withheld on the increased dividends.

Because the reinvested earnings add to the U.S. parent companies' claims on their foreign affiliates, a transaction that reflects the deemed transmission of these funds back to the foreign affiliates for reinvestment is recorded in the financial account of the ITAs as reinvestment of earnings, a component of direct investment equity (ITA table 6.1, line 4). A decrease in reinvested earnings resulting from increased dividends would therefore result in smaller direct investment equity transactions. Depending on the form in which the dividends are repatriated—cash, debt, or other financial instrument—the smaller direct investment equity transactions would be balanced or offset by transactions in one or more of the other financial account components because of the double-entry accounting principles underlying the ITAs.

• U.S. Bureau of Economic Analysis, “How are the International Transactions Accounts affected by an increase in direct investment dividend receipts?,” FAQ (June 28, 2018), available at https://www.bea.gov/help/faq/166 (last visited Dec. 19, 2018).

U.S. International Transactions, 3rd Quarter 2018

Current-Account Balance

The U.S. current-account deficit increased to $124.8 billion (preliminary) in the third quarter of 2018 from $101.2 billion (revised) in the second quarter of 2018, according to statistics released by the Bureau of Economic Analysis (BEA). The deficit was 2.4 percent of current-dollar gross domestic product (GDP) in the third quarter, up from 2.0 percent in the second quarter.

The $23.6 billion increase in the current-account deficit mainly reflected a $24.0 billion increase in the deficit on goods.

Current-Account Transactions (tables 1-5)

Exports of goods and services and income receipts

Exports of goods and services and income receipts decreased $6.2 billion in the third quarter to $930.3 billion.

• Goods exports decreased $7.7 billion to $421.8 billion, mostly reflecting a decrease in foods, feeds, and beverages, primarily soybeans.
• Primary income receipts decreased $1.8 billion to $264.5 billion, primarily reflecting a decrease in direct investment income. An increase in portfolio investment income partly offset the decrease. For more information on direct investment income, see the box “Effects of the 2017 Tax Cuts and Jobs Act on Components of the International Transactions Accounts.”
• Services exports increased $1.8 billion to $207.6 billion, mostly reflecting increases in charges for the use of intellectual property, in financial services, and in other business services, primarily professional and management services.

Imports of goods and services and income payments

Imports of goods and services and income payments increased $17.4 billion in the third quarter to $1,055.1 billion.

• Goods imports increased $16.3 billion to $648.8 billion, mostly reflecting increases in consumer goods, primarily cell phones, in industrial supplies and materials, primarily petroleum and products, and in automotive vehicles, parts, and engines.

Effects of the 2017 Tax Cuts and Jobs Act on Components of the International Transactions Accounts

In the international transactions accounts, income on equity, or earnings, of foreign affiliates of U.S. multinational enterprises in a period consists of a portion that is repatriated to the parent company in the United States in the form of dividends and a portion that is reinvested in foreign affiliates. At times, repatriation of dividends exceeds current-period earnings, resulting in negative values being recorded for reinvested earnings. For the first half of 2018, dividends exceeded earnings, reflecting the repatriation of accumulated prior earnings by foreign affiliates of U.S. multinational enterprises to their parent companies in the United States in response to the 2017 Tax Cuts and Jobs Act (TCJA), which generally eliminates taxes on repatriated earnings. The negative reinvested earnings in the first half of 2018 reflect the fact that U.S. parent companies withdrew accumulated prior earnings from their foreign affiliates. Preliminary statistics for the third quarter show positive reinvested earnings and lower dividends (see table below). The reinvested earnings are also reflected in the net acquisition of direct investment assets in the financial account, which was $76.8 billion in the third quarter and −$207.4 billion in the first half of 2018 (table 6).

Direct Investment Earnings
Billions of dollars, seasonally adjusted
	2017				2018			Sum of First Three Quarters
	I	II	III	IV	I	II r	III p	2017	2018
Direct investment earnings	114.1	114.4	120.3	128.9	128.1	132.9	129.8	348.8	390.8
Dividends	38.2	34.9	55.1	26.9	294.9	183.7	92.7	128.2	571.3
Reinvested earnings	75.9	79.5	65.2	102.0	-166.8	-50.8	37.1	220.6	-180.5
p Preliminary   r Revised

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

In addition to the repatriation of accumulated earnings, some companies made other changes to their business practices in reaction to the TCJA. For example, some insurance companies changed how they operate in response to the base erosion and anti-abuse tax (BEAT) provision of the TCJA. BEAT is a tax on certain payments from a U.S. company to a related foreign party, which can include premium payments for reinsurance. In response to the new tax, many U.S. insurance companies terminated these intracompany reinsurance contracts. As a result, premiums paid by U.S. insurers to foreign insurers in the first three quarters of 2018 were $73.9 billion, down from $98.4 billion for the same period in 2017 (table 3). Similarly, insurance services imports in the first three quarters of 2018 were $28.8 billion, down from $38.2 billion for the same period in 2017.**

For more information on the estimation methods used to compile insurance services, see the insurance section in "U.S. International Economic Accounts: Concepts and Methods."

Capital Account (table 1)

Capital transfer receipts were $0.6 billion in the third quarter. The transactions reflected receipts from foreign insurance companies for losses resulting from Hurricane Florence. For information on transactions associated with hurricanes and other disasters, see “How do losses recovered from foreign insurance companies following natural or man-made disasters affect foreign transactions, the current account balance, and net lending or net borrowing?”

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

Net U.S. borrowing measured by financial-account transactions was $31.3 billion in the third quarter, a decrease from net borrowing of $153.7 billion in the second quarter.

Financial assets

Net U.S. acquisition of financial assets excluding financial derivatives was $132.7 billion in the third quarter following net U.S. liquidation of $199.9 billion in the second quarter.

• Net U.S. acquisition of direct investment assets was $76.8 billion following net U.S. withdrawal of $68.1 billion in the second quarter. The net withdrawal of direct investment assets in the first half of 2018 reflected U.S. parent repatriation of previously reinvested earnings in response to the TCJA. For more information, see the box "Effects of the 2017 Tax Cuts and Jobs Act on Components of the International Transactions Accounts."
• Net U.S. liquidation of other investment assets decreased $104.1 billion to $16.6 billion. The decrease in the net liquidation mostly reflected a decrease in the net foreign repayment of loans.
• Net U.S. purchases of portfolio investment assets were $72.6 billion following net U.S. sales of $14.3 billion in the second quarter. This change mostly reflected net U.S. purchases of foreign equity and investment fund shares following net sales in the second quarter.

Liabilities

Net U.S. incurrence of liabilities excluding financial derivatives was $151.7 billion in the third quarter following net U.S. repayment of $63.3 billion in the second quarter.

• Net U.S. incurrence of other investment liabilities was $16.9 billion following net U.S. repayment of $100.4 billion in the second quarter. This change primarily reflected net foreign provision of loans following net U.S. repayment in the second quarter.
• Net U.S. incurrence of direct investment liabilities increased $105.8 billion to $122.3 billion, mostly reflecting an increase in equity liabilities.
• Net U.S. incurrence of portfolio investment liabilities decreased $8.1 billion to $12.5 billion. This decrease reflected largely offsetting transactions in U.S. equity and debt liabilities.

Financial derivatives

Transactions in financial derivatives other than reserves reflected third-quarter net borrowing of $12.3 billion, a $4.7 billion decrease in net borrowing from the second quarter.

Statistical Discrepancy (table 1)

The statistical discrepancy was $93.0 billion in the third quarter following a statistical discrepancy of −$52.4 billion in the second quarter.

Updates to Second Quarter 2018 International Transactions Accounts Aggregate
Billions of dollars, seasonally adjusted
	Preliminary estimate	Revised estimate
Current-account balance	–101.5	–101.2
Goods balance	–202.2	–203.1
Services balance	69.3	68.5
Primary-income balance	60.8	62.3
Secondary-income balance	–28.5	–29.0
Net lending (+)/borrowing (–) from financial-account transactions	–134.3	–153.6
Statistical discrepancy	–32.9	–52.4

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Next release: March 21, 2019 at 8:30 A.M. EDT

** 10.96. Insurance services. Insurance services include the direct insurance services of providing life insurance (including annuities) and nonlife (property and casualty) insurance, reinsurance, and auxiliary insurance services. Direct insurance and reinsurance are measured as gross premiums earned plus premium supplements less claims payable, with an adjustment for claims volatility. Premium supplements represent investment income from insurance reserves attributed to policyholders who are treated as paying the income back to the insurer. Auxiliary insurance is measured separately and includes agents’ commissions, brokerage services, insurance consulting services, actuarial services, and other insurance services. BEA does not include the BPM6 component pension services due to a lack of source data.

10.97. While premiums and premium supplements are relatively stable, claims payable, which are subtracted from premiums, can be quite volatile from quarter to quarter. The resulting measure of insurance services could thus be erratic, or even negative, in periods of catastrophic events. To deal with fluctuating loss settlements, insurance services are measured as premiums less claims payable adjusted for claims volatility, a concept called “expected losses.” Expected losses are inferred from the relationship between actual losses and premiums averaged over six years. An additional adjustment is made for losses related to certain catastrophic events, which are averaged over 20 years. This treatment removes much of the volatility in insurance services that can be caused by large swings in actual losses. 

10.98. Expected losses are considered transfers from the policyholders to the insurance company and are recorded in secondary income as a current transfer. Claims payable are transfers from the insurance company back to the policyholder and are also recorded in secondary income. An exception to this treatment is for catastrophic losses, which BEA defines as events where the total impact, insured and uninsured, is greater than one percent of gross domestic product. For catastrophic losses, the full amount of the insured loss is entered as a transfer in the capital account in the quarter in which the event occurs. This treatment considers the recovery of losses as an increase in financial assets, rather than an increase in current economic activity that would have been implied if it were combined with regular losses in current transfers. The treatment also removes a significant source of volatility in the current-account balance.

10.99. Statistics for insurance services are based on BEA survey data and company reports. The BEA surveys include the Quarterly Survey of Insurance Transactions by U.S. Insurance Companies With Foreign Persons (BE–45) and the Benchmark Survey of Insurance Transactions by U.S. Insurance Companies With Foreign Persons (BE–140). Direct insurance and reinsurance are estimated separately. An amount collected on BEA surveys is added for auxiliary services such as agents’ commissions and insurance brokerage and agency services. Most crossborder activity occurs in reinsurance where U.S. purchases from foreign reinsurance companies greatly exceed foreign purchases of reinsurance from companies in the United States. 

Gross Domestic Product by County, 2012-2015

 

The Bureau of Economic Analysis released prototype statistics for gross domestic product (GDP) by county for 2012-2015. Combined with BEA's county estimates of personal income, GDP by county offers a more complete picture of local area economic conditions. In conjunction with their release, BEA is requesting feedback and comments on these prototype statistics to assist in improving their quality, reliability and usefulness.

"This is the first time the Bureau of Economic Analysis is providing GDP statistics for each and every county in the United States," said Secretary of Commerce Wilbur Ross. "The prototype data addresses one of the last remaining gaps in economic knowledge, offering policymakers and businesses a new tool to inform their decision-making."

These prototype GDP statistics, which provide detail for 3,113 counties, include industry breakouts for private goods-producing industries, private services-producing industries, and the government and government enterprises industry group. These statistics represent another step forward in meeting BEA's long-standing goal of providing a more detailed geographic distribution of the nation's economic activity. County-level GDP statistics will assist analysts in the assessment of local economic performance and policymakers in the development of strategies to promote economic growth. They will also help answer important questions related to the size and condition of local area economies, industrial composition, and comparative growth trends.

GDP by county statistics provide a richer picture not only of the distribution of national economic output, but also of national economic trends and their manifestation at finer and alternative levels of geographic detail. They can be used to inform resource allocation decisions and support economic development strategies that target areas with the greatest need by identifying strengths and weaknesses of local economies. GDP by county statistics can also support research into understanding local economic dynamics, the longer-term impacts of different development strategies, and the effectiveness of incentive programs used to support these strategies.

Highlights

In 2015, real (inflation adjusted) GDP increased in 1,931 counties, decreased in 1,159, and was unchanged in 23. Real GDP ranged from $4.6 million in Loving County, TX to $656.0 billion in Los Angeles County, CA.

Large County Highlights

• Of the 138 large counties, those with populations greater than 500,000, real GDP increased in 125 and decreased in 13 in 2015.
• Real GDP ranged from $13.9 billion in Volusia County, FL to $656.0 billion dollars in Los Angeles County, CA.
• Denton County, TX (12.2 percent) and Santa Clara County, CA (11.1 percent) had the largest increases in real GDP in 2015. Growth in both counties was led by increases in private services-producing industries.
• The largest decreases in real GDP in 2015 were in Marion County, IN (-4.2 percent) and Montgomery County, TX (-2.3 percent). The private goods-producing industries led declines in both counties.

Medium County Highlights

• Of the 461 medium-sized counties, those with populations between 100,000 and 500,000, real GDP increased in 336, decreased in 120, and was unchanged in 5 in 2015.
• Real GDP ranged from $1.7 billion in Flagler County, FL to $52.3 billion dollars in Morris County, NJ.
• Whatcom County, WA (26.9 percent) and Guadalupe County, TX (22.0 percent) had the largest increases in real GDP in 2015. Growth in Whatcom County, WA was led by increases in private services-producing industries, while growth in Guadalupe County, TX was led by increases in private goods-producing industries.
• The largest decreases in real GDP in 2015 were in Waukesha County, WI (-16.1 percent) and Tazewell County, IL (-13.4 percent). The private services-producing industries led declines in Waukesha County, WI, while private goods-producing industries led declines in Tazewell County, IL.

Small County Highlights

• Of the 2,514 small counties, those with populations less than 100,000, real GDP increased in 1,470, decreased in 1,026, and was unchanged in 18 in 2015.
• Real GDP ranged from $4.6 million in Loving County, TX to $8.7 billion dollars in St. Charles Parish, LA.
• Roberts County, TX (72.3 percent) and Briscoe County, TX (68.4 percent) had the largest increases in real GDP in 2015. Growth in both counties was led by increases in private services-producing industries.
• The largest decreases in real GDP in 2015 were in Slope County, ND (-37.8 percent) and Sanders County, MT (-34.9 percent). The private goods-producing industries led declines in Slope County, ND, while private services-producing industries led declines in Sanders County, MT.

Report on U.S. Portfolio Holdings of Foreign Securities at End-Year

The findings from the annual survey of U.S. portfolio holdings of foreign securities at year-end 2017 were released today and posted on the Treasury web site at https://www.treasury.gov/resource-center/data-chart-center/tic/Pages/fpis.aspx.

The survey was undertaken jointly by the U.S. Department of the Treasury, the Federal Reserve Bank of New York, and the Board of Governors of the Federal Reserve System. 

A complementary survey measuring foreign holdings of U.S. securities is also conducted annually.  Data from the most recent such survey, which reports on securities held at end-June 2018, are currently being processed.  Preliminary results are expected to be reported on February 28, 2019.  See for historical data: http://www.treasury.gov/resource-center/data-chart-center/tic/Pages/index.aspx

Overall Results

This survey measured the value of U.S. portfolio holdings of foreign securities at year-end 2017 as approximately $12.4 trillion, with $9.1 trillion held in foreign equity, $2.8 trillion held in foreign long-term debt securities (original term-to-maturity in excess of one year), and $0.5 trillion held in foreign short-term debt securities.  The previous such survey, conducted as of year-end 2016, measured U.S. holdings of approximately $9.9 trillion, with $7.1 trillion held in foreign equity, $2.4 trillion held in foreign long-term debt securities, and $0.3 trillion held in foreign short-term debt securities.  The increase during 2017 occurred mainly in equity.

U.S. portfolio holdings of foreign securities by country at the end of 2017 were the largest for the Cayman Islands ($1.77 trillion), followed by the United Kingdom ($1.47 trillion), Japan ($1.13 trillion), and Canada ($996 billion) (see Table 2).  These four countries attracted 43 percent of total U.S. portfolio investment, versus 43 percent the previous year.

The surveys are part of an internationally coordinated effort under the auspices of the International Monetary Fund (IMF) to improve the measurement of portfolio asset holdings.

Table 1.  U.S. holdings of foreign securities, by type of security, as of survey dates [1]

(Billions of dollars)

 

Type of Security	Dec. 31, 2016	Dec. 31, 2017
Long-term Securities	9,583	11,953
Equity	7,146	9,118
Long-term debt	2,436	2,835
Short-term debt securities	308	456
Total	9,891	12,409

 

U.S. Portfolio Investment by Country

 

Table 2.  Market value of U.S. portfolio holdings of foreign securities, by country and type of security, for countries attracting the most U.S. investment, as of December 31, 2017 [1]

(Billions of dollars)

Country or category	Total	Equity	Debt
			Total	Long-term	Short-term
Cayman Islands	1,767	1,362	405	403	2
United Kingdom	1,473	1,091	382	336	46
Japan	1,132	902	230	123	107
Canada	996	512	484	381	102
France	605	442	163	134	29
Netherlands	538	345	193	185	8
Switzerland	506	477	29	26	2
Ireland	495	421	74	70	4
Germany	494	400	94	83	11
Australia	355	197	158	114	44
Bermuda	263	229	34	34	*
Korea, South	263	242	21	20	1
India	194	181	14	13	1
Brazil	182	148	34	34	*
Taiwan	178	178	*	*	0
Sweden	172	107	65	43	23
Singapore	171	143	28	11	17
Hong Kong [2]	164	155	8	4	4
Mexico	163	67	96	94	2
China, mainland [2]	162	158	4	3	1
Rest of world	2,135	1,361	774	723	51
Total	12,409	9,118	3,291	2,835	456

*     Greater than zero but less than $500 million.

Items may not sum to totals due to rounding.

[1] The stock of foreign securities for December 31, 2017, reported in this survey may not, for a number of reasons, correspond to the stock of foreign securities on December 31, 2016, plus cumulative flows reported in Treasury’s transactions reporting system.  An analysis of the relationship between the stock and flow data is available in Table 4 and the associated text of the “Report on U.S. Portfolio Holdings of Foreign Securities at end-year 2017.”

[2] China, Hong Kong, and Macau are all reported separately.

Gross Domestic Product by Industry: Second Quarter 2018

Information; real estate and rental and leasing; and professional, scientific, and technical services were the leading contributors to the increase in U.S. economic growth in the second quarter of 2018. 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 4.2 percent increase in real GDP in the second quarter.

 

• For the information services industry group, real value added—a measure of an industry’s contribution to GDP—increased 13.4 percent in the second quarter, after increasing 4.3 percent in the first quarter. The second quarter growth primarily reflected an increase in data processing, internet publishing, and other information services.
• Real estate and rental and leasing increased 5.3 percent, after increasing 2.7 percent. The second quarter growth primarily reflected increases to other real estate, which includes offices of real estate agents and brokers, as well as housing.
• Professional, scientific, and technical services increased 9.3 percent, after increasing 6.0 percent. The second quarter growth primarily reflected an increase in miscellaneous professional, scientific, and technical services, which includes advertising and research and development services.

Other highlights

• Real GDP growth accelerated to 4.2 percent in the second quarter, up from 2.2 percent in the first quarter. Mining was the leading contributor to the acceleration in real GDP growth in the second quarter. Real value added for the industry group increased 11.7 percent, after decreasing 18.0 percent in the first quarter.
• Health care and social assistance increased 4.7 percent, after increasing 4.6 percent, primarily reflecting an increase in ambulatory health care services.
• Durable goods manufacturing increased 7.3 percent, after increasing 4.7 percent. The second quarter increase was primarily attributed to motor vehicles, bodies and trailers, and parts manufacturing.

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 4.0 percent in the second quarter. This reflected an increase of 3.6 percent for the private goods-producing sector, 4.6 percent for the private services-producing sector, and 1.5 percent for the government sector. Overall, 21 of 22 industry groups contributed to the increase in real gross output.

• Real gross output for mining increased 33.2 percent in the second quarter, after increasing 13.2 percent in the first quarter. This was the largest increase since the first quarter of 2017 and was primarily attributed to oil and gas extraction.
• Information increased 8.9 percent, after increasing 9.2 percent, primarily reflecting increases in data processing, internet publishing, and other information services, as well as motion picture and sound recording industries.
• Health care and social assistance increased 4.5 percent, after increasing 2.9 percent. This industry has increased for four consecutive quarters.

 

Comprehensive Update of the Industry Economic Accounts

The estimates released today reflect the results of the comprehensive update of the Industry Economic Accounts. The comprehensive update includes revised quarterly estimates beginning with the first quarter of 2005 and annual statistics revised back to 1997. The update incorporates source data that are more complete and reliable than those previously available. Major improvements introduced with this update include:

• Updated industry and commodity definitions consistent with the 2012 North American Industry Classification System (NAICS).
• The results of the 2012 benchmark supply-use tables (SUTs) that incorporate U.S. Census Bureau data on shipments, receipts, and business expenses from the 2012 Economic Census, Business Expenses Supplement, and Service Annual Survey (SAS).
• Incorporation of results from the 2018 comprehensive update of the National Income and Product Accounts, including improved deflation of software, medical equipment, and communications equipment, and the reclassification of research and development (R&D) for software originals from own-account software to R&D.
• A shift in emphasis toward SUTs consistent with international recommendations from the 2008 System of National Accounts (SNA).
• Introduction of more detailed annual data on value added, gross output, and intermediate inputs at roughly the four-digit NAICS level of detail (138 industries) as part of the underlying detail for the Industry Economic Accounts.
• Incorporation of newly available and revised source data (including the Census Bureau’s Service Annual Survey, the Bureau of Labor Statistics’ Quarterly Census of Employment and Wages, and the Department of Treasury’s Statistics of Income).

Benchmark and annual supply-use tables, as well as the full set of GDP by industry results can be found on the BEA Web site. The updated estimates reflect previously announced improvements. Additional information will be available in an article in the December 2018 issue of the Survey of Current Business.

U.S. International Trade in Goods and Services, September 2018

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced today that the goods and services deficit was $54.0 billion in September, up $0.7 billion from $53.3 billion in August, revised.

U.S. International Trade in Goods and Services Deficit

Deficit:	$54.0 Billion	+1.3%°
Exports:	$212.6 Billion	+1.5%°
Imports:	$266.6 Billion	+1.5%°
Next release: December 6, 2018 (°) Statistical significance is not applicable or not measurable. Data adjusted for seasonality but not price changes Source: U.S. Census Bureau, U.S. Bureau of Economic Analysis; U.S. International Trade in Goods and Services, November 2, 2018.

Exports, Imports, and Balance (exhibit 1)

September exports were $212.6 billion, $3.1 billion more than August exports. September imports were $266.6 billion, $3.8 billion more than August imports.

The September increase in the goods and services deficit reflected an increase in the goods deficit of $0.6 billion to $77.2 billion and a decrease in the services surplus of $0.1 billion to $23.2 billion.

Year-to-date, the goods and services deficit increased $40.7 billion, or 10.1 percent, from the same period in 2017. Exports increased $143.8 billion or 8.2 percent. Imports increased $184.5 billion or 8.6 percent.

Three-Month Moving Averages (exhibit 2)

The average goods and services deficit increased $2.8 billion to $52.5 billion for the three months ending in September.

• Average exports decreased $0.2 billion to $211.0 billion in September.
• Average imports increased $2.5 billion to $263.5 billion in September.

Year-over-year, the average goods and services deficit increased $8.2 billion from the three months ending in September 2017.

• Average exports increased $14.7 billion from September 2017.
• Average imports increased $22.9 billion from September 2017.

Exports (exhibits 3, 6, and 7)

Exports of goods increased $2.9 billion to $141.9 billion in September.

  Exports of goods on a Census basis increased $2.8 billion.

• Industrial supplies and materials increased $2.8 billion.
  • Other petroleum products increased $1.1 billion.
  • Nonmonetary gold increased $1.0 billion.
• Capital goods increased $1.1 billion.
  • Civilian aircraft increased $1.2 billion.
• Foods, feeds, and beverages decreased $1.0 billion.
  • Soybeans decreased $0.7 billion.

  Net balance of payments adjustments increased $0.1 billion.

Exports of services increased $0.3 billion to $70.7 billion in September.

• Transport increased $0.2 billion.

Imports (exhibits 4, 6, and 8)

Imports of goods increased $3.5 billion to $219.1 billion in September.

  Imports of goods on a Census basis increased $3.7 billion.

• Capital goods increased $2.4 billion.
  • Telecommunications equipment increased $0.5 billion.
  • Civilian aircraft engines increased $0.5 billion.
  • Computer accessories increased $0.4 billion.
  • Computers increased $0.4 billion.
• Consumer goods increased $2.0 billion.
  • Other textile apparel and household goods increased $0.5 billion.
  • Toys, games, and sporting goods increased $0.4 billion.
  • Cell phones and other household goods increased $0.3 billion.
• Automotive vehicles, parts, and engines decreased $0.6 billion.
  • Trucks, buses, and special purpose vehicles decreased $0.6 billion.

  Net balance of payments adjustments decreased $0.2 billion.

Imports of services increased $0.4 billion to $47.5 billion in September.

• Transport increased $0.4 billion.

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

The real goods deficit increased $0.8 billion to $87.0 billion in September.

• Real exports of goods increased $3.1 billion to $151.0 billion.
• Real imports of goods increased $3.9 billion to $238.1 billion.

Revisions

Revisions to August exports

• Exports of goods were revised up $0.1 billion.
• Exports of services were revised down $0.1 billion.

Revisions to August imports

• Imports of goods were revised down less than $0.1 billion.
• Imports of services were revised up $0.1 billion.

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

The September figures show surpluses, in billions of dollars, with South and Central America ($3.2), Hong Kong ($2.4), Brazil ($0.6), and Singapore ($0.1). Deficits were recorded, in billions of dollars, with China ($37.4), European Union ($14.2), Mexico ($7.6), Germany ($5.2), Japan ($4.9), Italy ($2.3), OPEC ($2.3), Canada ($2.2), South Korea ($2.0), India ($1.7), Saudi Arabia ($1.5), France ($1.5), Taiwan ($0.9), and United Kingdom ($0.2).

• The deficit with China increased $3.0 billion to $37.4 billion in September. Exports increased $0.4 billion to $10.2 billion and imports increased $3.5 billion to $47.7 billion.
• The deficit with members of OPEC increased $1.3 billion to $2.3 billion in September. Exports decreased $0.6 billion to $4.6 billion and imports increased $0.8 billion to $6.9 billion.
• The deficit with Mexico decreased $1.1 billion to $7.6 billion in September. Exports increased $1.1 billion to $22.5 billion and imports decreased less than $0.1 billion to $30.1 billion.

U.S. International Trade in Goods and Services, August 2018

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced today that the goods and services deficit was $53.2 billion in August, up $3.2 billion from $50.0 billion in July, revised.

Exports, Imports, and Balance (exhibit 1)

August exports were $209.4 billion, $1.7 billion less than July exports. August imports were $262.7 billion, $1.5 billion more than July imports.

The August increase in the goods and services deficit reflected an increase in the goods deficit of $3.6 billion to $76.7 billion and an increase in the services surplus of $0.4 billion to $23.5 billion.

Year-to-date, the goods and services deficit increased $31.0 billion, or 8.6 percent, from the same period in 2017. Exports increased $129.6 billion or 8.4 percent. Imports increased $160.6 billion or 8.4 percent.

Three-Month Moving Averages (exhibit 2)

The average goods and services deficit increased $3.6 billion to $49.7 billion for the three months ending in August.

• Average exports decreased $1.7 billion to $211.2 billion in August.
• Average imports increased $1.8 billion to $260.9 billion in August.

Year-over-year, the average goods and services deficit increased $5.3 billion from the three months ending in August 2017.

• Average exports increased $16.1 billion from August 2017.
• Average imports increased $21.3 billion from August 2017.

Exports (exhibits 3, 6, and 7)

Exports of goods decreased $1.9 billion to $138.9 billion in August.

    Exports of goods on a Census basis decreased $1.8 billion.

• Industrial supplies and materials decreased $2.4 billion.
  • Crude oil decreased $0.9 billion.
  • Other petroleum products decreased $0.7 billion.
• Foods, feeds, and beverages decreased $1.2 billion.
  • Soybeans decreased $1.0 billion.
• Consumer goods increased $1.6 billion.
  • Artwork, antiques, stamps, and other collectibles increased $0.6 billion.
  • Pharmaceutical preparations increased $0.4 billion.

    Net balance of payments adjustments decreased $0.1 billion.

Exports of services increased $0.2 billion to $70.5 billion in August.

• Financial services increased $0.1 billion.
• Maintenance and repair services increased $0.1 billion.

Imports (exhibits 4, 6, and 8)

Imports of goods increased $1.7 billion to $215.6 billion in August.

    Imports of goods on a Census basis increased $1.6 billion.

• Automotive vehicles, parts, and engines increased $1.0 billion.
• Passenger cars increased $0.6 billion.
• Trucks, buses, and special purpose vehicles increased $0.4 billion.
• Consumer goods increased $0.9 billion.
• Cell phones and other household goods increased $0.9 billion.

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

Imports of services decreased $0.1 billion to $47.0 billion in August.

• Charges for the use of intellectual property decreased $0.2 billion. Charges for July included payments for the rights to broadcast the 2018 soccer World Cup.
• Other business services, which includes research and development services; professional and management services; and technical, trade-related, and other services, increased $0.1 billion.

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

The real goods deficit increased $3.8 billion to $86.3 billion in August.

• Real exports of goods decreased $1.8 billion to $147.8 billion.
• Real imports of goods increased $2.1 billion to $234.1 billion.

Revisions

Revisions to July exports

• Exports of goods were revised up less than $0.1 billion.
• Exports of services were revised up less than $0.1 billion.

Revisions to July imports

• Imports of goods were revised up less than $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 August figures show surpluses, in billions of dollars, with South and Central America ($3.4), Hong Kong ($2.3), Singapore ($0.6), and Brazil ($0.5). Deficits were recorded, in billions of dollars, with China ($34.4), European Union ($14.9), Mexico ($8.7), Japan ($5.8), Germany ($5.3), Canada ($3.0), Italy ($2.7), India ($1.9), South Korea ($1.8), France ($1.3), Saudi Arabia ($1.1), OPEC ($1.0), Taiwan ($0.7), and United Kingdom ($0.1).

• The deficit with Mexico increased $2.3 billion to $8.7 billion in August. Exports decreased $1.3 billion to $21.5 billion and imports increased $1.0 billion to $30.2 billion.
• The deficit with Japan increased $0.9 billion to $5.8 billion in August. Exports decreased $0.5 billion to $6.1 billion and imports increased $0.4 billion to $11.9 billion.
• The deficit with members of OPEC decreased $2.0 billion to $1.0 billion in August. Exports increased $0.9 billion to $5.2 billion and imports decreased $1.1 billion to $6.2 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/data/intl-trade-investment/international-trade-goods-and-services. The full schedule is available in the Census Bureau's Economic Briefing Room at www.census.gov/economic-indicators/ or on BEA's Web site at www.bea.gov/news/schedule.

*             *             *

Next release: November 2, 2018, at 8:30 A.M. EDT

Global FDI outflows tumble 44% in the first quarter of 2018 due to US tax reform

FDI outflows tumble 44% in the first quarter of 2018 due to US tax reform

Global FDI outflows fell to USD 136 billion from USD 242 billion in the previous quarter. This precipitous drop was largely due to a switch to negative outward FDI from the United States.   Download OECD FDI TCJA Impact July-2018

Accompanying Excel tables

Past issues of FDI in Figures

Treasury International Capital Data for July

The U.S. Department of the Treasury released Treasury International Capital (TIC) data for July 2018.  The next release, which will report on data for August 2018, is scheduled for October 16, 2018.

The sum total in July of all net foreign acquisitions of long-term securities, short-term U.S. securities, and banking flows was a net TIC inflow of $52.2 billion.  Of this, net foreign private inflows were $71.6 billion, and net foreign official outflows were $19.4 billion.

Foreign residents increased their holdings of long-term U.S. securities in July; net purchases were $40.6 billion.  Net purchases by private foreign investors were $54.4 billion, while net sales by foreign official institutions were $13.8 billion.

U.S. residents decreased their holdings of long-term foreign securities, with net sales of $34.2 billion.

Taking into account transactions in both foreign and U.S. securities, net foreign purchases of long-term securities were $74.8 billion.  After including adjustments, such as estimates of unrecorded principal payments to foreigners on U.S. asset-backed securities, overall net foreign purchases of long-term securities are estimated to have been $56.6 billion in July.

Foreign residents increased their holdings of U.S. Treasury bills by $8.5 billion.  Foreign resident holdings of all dollar-denominated short-term U.S. securities and other custody liabilities increased by $5.3 billion.

Banks’ own net dollar-denominated liabilities to foreign residents decreased by $9.8 billion.

Complete data are available on the Treasury website at:

www.treasury.gov/resource-center/data-chart-center/tic/Pages/index.aspx

About TIC Data

The monthly data on holdings of long-term securities, as well as the monthly table on Major Foreign Holders of Treasury Securities, reflect foreign holdings of U.S. securities collected primarily on the basis of custodial data.  These data help provide a window into foreign ownership of U.S. securities, but they cannot attribute holdings of U.S. securities with complete accuracy.  For example, if a U.S. Treasury security purchased by a foreign resident is held in a custodial account in a third country, the true ownership of the security will not be reflected in the data.  The custodial data will also not properly attribute U.S. Treasury securities managed by foreign private portfolio managers who invest on behalf of residents of other countries.  In addition, foreign countries may hold dollars and other U.S. assets that are not captured in the TIC data.  For these reasons, it is difficult to draw precise conclusions from TIC data about changes in the foreign holdings of U.S. financial assets by individual countries.

Press notice TIC for September 2018

			TIC Monthly Reports on Cross-Border Financial Flows
			(Billions of dollars, not seasonally adjusted)
								12 Months Through
						2016	2017	Jul-17	Jul-18	Apr	May	Jun	Jul
		Foreigners' Acquisitions of Long-term Securities
1			Gross Purchases of Domestic U.S. Securities			29632.6	31501.6	30635.4	34205.6	2834.8	3113.0	2893.5	2742.8
2			Gross Sales of Domestic U.S. Securities			29574.6	31096.2	30439.2	33847.2	2812.2	3092.7	2939.0	2702.2
3			Domestic Securities Purchased, net (line 1 less line 2) /1			58.0	405.4	196.2	358.5	22.6	20.3	-45.5	40.6
4				Private, net /2		348.7	510.6	377.9	389.0	66.1	31.2	-43.5	54.4
5					Treasury Bonds & Notes, net	5.7	169.3	96.3	118.8	43.5	50.5	-40.3	42.0
6					Gov't Agency Bonds, net	225.1	93.0	132.0	120.9	14.0	1.7	13.1	21.4
7					Corporate Bonds, net	130.0	129.8	98.9	116.5	3.0	6.8	9.8	5.1
8					Equities, net	-12.2	118.4	50.6	32.8	5.5	-27.8	-26.2	-14.1
9				Official, net /3		-290.7	-105.1	-181.7	-30.6	-43.5	-10.9	-2.0	-13.8
10					Treasury Bonds & Notes, net	-331.5	-149.4	-228.6	-106.8	-48.3	-23.8	-8.3	-23.0
11					Gov't Agency Bonds, net	40.8	42.0	44.5	82.1	5.7	13.5	6.8	10.4
12					Corporate Bonds, net	-5.3	1.7	-1.5	-1.1	-1.4	-1.9	0.4	-1.2
13					Equities, net	5.4	0.5	3.8	-4.8	0.5	1.2	-0.9	0.0
14			Gross Purchases of Foreign Securities from U.S. Residents			10124.4	13710.7	11821.1	16143.8	1471.6	1428.6	1401.1	1338.3
15			Gross Sales of Foreign Securities to U.S. Residents			9921.3	13583.6	11691.9	15886.3	1400.2	1403.3	1392.1	1304.1
16			Foreign Securities Purchased, net (line 14 less line 15) /4			203.1	127.1	129.2	257.5	71.4	25.2	9.0	34.2
17					Foreign Bonds Purchased, net	258.7	233.2	225.8	262.3	38.6	26.1	15.2	32.9
18					Foreign Equities Purchased, net	-55.7	-106.1	-96.6	-4.8	32.8	-0.8	-6.2	1.3
19			Net Long-term Securities Transactions (line 3 plus line 16):			261.0	532.6	325.4	615.9	94.0	45.5	-36.5	74.8
20			Other Acquisitions of Long-term Securities, net /5			-313.9	-224.2	-256.6	-96.4	81.2	-14.3	-14.9	-18.2
21		Net Foreign Acquisition of Long-term Securities
					(lines 19 and 20):	-52.9	308.4	68.8	519.5	175.2	31.2	-51.4	56.6
22		Increase in Foreign Holdings of Dollar-denominated Short-term
					U.S. Securities and Other Custody Liabilities: /6	12.8	40.1	78.2	352.5	8.9	31.5	256.4	5.3
23			U.S. Treasury Bills			-55.9	33.5	-2.8	78.5	-5.5	30.0	9.3	8.5
24				Private, net		-16.9	14.0	-56.8	69.4	-10.1	6.9	19.2	5.2
25				Official, net		-39.0	19.5	54.0	9.1	4.6	23.1	-10.0	3.3
26			Other Negotiable Instruments
					and Selected Other Liabilities: /7	68.7	6.6	81.1	274.0	14.5	1.5	247.2	-3.2
27				Private, net		67.4	6.2	75.3	271.7	9.1	0.3	249.0	-5.9
28				Official, net		1.3	0.4	5.8	2.4	5.4	1.2	-1.8	2.7
29		Change in Banks' Own Net Dollar-denominated Liabilities				-110.2	77.4	-36.5	-66.6	50.2	7.6	-15.4	-9.8
30	Monthly Net TIC Flows (lines 21,22,29) /8					-150.3	425.9	110.5	805.4	234.3	70.3	189.7	52.2
		of which
31			Private, net			218.7	608.1	308.6	910.7	259.1	59.2	216.6	71.6
32			Official, net			-368.9	-182.2	-198.1	-105.3	-24.8	11.1	-26.9	-19.4
/1			Net foreign purchases of U.S. securities (+)
/2			Includes international and regional organizations
/3			The reported division of net purchases of long-term securities between net purchases by foreign official institutions and net purchases
				of other foreign investors is subject to a "transaction bias" described in Frequently Asked Questions 7 and 10.a.4 on the TIC website.
/4			Net transactions in foreign securities by U.S. residents. Foreign purchases of foreign securities = U.S. sales of foreign securities to foreigners.
				Thus negative entries indicate net U.S. purchases of foreign securities, or an outflow of capital from the United States; positive entries
				indicate net U.S. sales of foreign securities.
/5			Minus estimated unrecorded principal repayments to foreigners on domestic corporate and agency asset-backed securities +
				estimated foreign acquisitions of U.S. equity through stock swaps -
				estimated U.S. acquisitions of foreign equity through stock swaps +
				increase in nonmarketable Treasury Bonds and Notes Issued to Official Institutions and Other Residents of Foreign Countries.
/6			These are primarily data on monthly changes in banks' and broker/dealers' custody liabilities. Data on custody claims are collected
				quarterly and published in the TIC website.
/7			"Selected Other Liabilities" are primarily the foreign liabilities of U.S. customers that are managed by U.S. banks or broker/dealers.
/8			TIC data cover most components of international financial flows, but do not include data on direct investment flows, which are collected
				and published by the Department of Commerce's Bureau of Economic Analysis. In addition to the monthly data summarized here, the
				TIC collects quarterly data on some banking and nonbanking assets and liabilities. Frequently Asked Question 1 on the TIC website
				describes the scope of TIC data collection.

Gross Domestic Product, 2nd quarter 2018 (third estimate); Corporate Profits, 2nd quarter 2018 (revised estimate)

Real gross domestic product (GDP) increased at an annual rate of 4.2 percent in the second quarter of 2018 (table 1), according to the "third" estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 2.2 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 also 4.2 percent. With this third estimate for the second quarter, the general picture of economic growth remains the same; a downward revision to private inventory investment was offset by small upward revisions to most other GDP components. Imports which are a subtraction in the calculation of GDP, were revised down slightly (see "Updates to GDP" on page 2).

Real gross domestic income (GDI) increased 1.6 percent in the second quarter, compared with an increase of 3.9 percent in the first quarter. The average of real GDP and real GDI, a supplemental measure of U.S. economic activity that equally weights GDP and GDI, increased 2.9 percent in the second quarter, compared with an increase of 3.1 percent in the first quarter (table 1).

The increase in real GDP in the second quarter reflected positive contributions from PCE, nonresidential fixed investment, exports, federal government spending, and state and local government spending that were partly offset by negative contributions from private inventory investment and residential fixed investment. Imports decreased (table 2).

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

Current-dollar GDP increased 7.6 percent, or $370.9 billion, in the second quarter to a level of $20.41 trillion. In the first quarter, current-dollar GDP increased 4.3 percent, or $209.2 billion (table 1 and table 3).

The price index for gross domestic purchases increased 2.4 percent in the second quarter, compared with an increase of 2.5 percent in the first quarter (table 4). The PCE price index increased 2.0 percent, compared with an increase of 2.5 percent. Excluding food and energy prices, the PCE price index increased 2.1 percent, compared with an increase of 2.2 percent.

Updates to GDP

The percent change in real GDP was unrevised from the second estimate, reflecting a downward revision to private inventory investment that was offset by upward revisions to state and local government spending, PCE, nonresidential fixed investment, exports, and residential fixed investment. Imports were revised down slightly.   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	4.1	4.2	4.2
Current-dollar GDP	7.4	7.6	7.6
Real GDI	…	1.8	1.6
Average of Real GDP and Real GDI	…	3.0	2.9
Gross domestic purchases price index	2.3	2.3	2.4
PCE price index	1.8	1.9	2.0

Corporate Profits (table 10)

Profits from current production (corporate profits with inventory valuation and capital consumption adjustments) increased $65.0 billion in the second quarter, compared with an increase of $26.7 billion in the first quarter.

Profits of domestic financial corporations increased $16.5 billion in the second quarter, in contrast to a decrease of $9.3 billion in the firstquarter. Profits of domestic nonfinancial corporations increased $53.0 billion, compared with an increase of $32.3 billion. Rest-of-the-world  profits decreased $4.5 billion, in contrast to an increase of $3.7 billion. In the second quarter, receipts increased $0.5 billion, and payments increased $5.0 billion.

State Quarterly Personal Income, 2nd quarter 2018

State personal income increased 4.2 percent, at an annual rate, in the second quarter of 2018, a deceleration from the 5.0 percent increase in the first quarter, according to estimates released today by the Bureau of Economic Analysis (table 1). The percent change in personal income across all states ranged from 6.0 percent in Texas to 1.6 percent in Washington.

Increases in earnings, property income, and transfer receipts all contributed to growth in second quarter personal income (table 2).

Earnings. For the nation, earnings increased 4.5 percent in the second quarter of 2018, after increasing 5.1 percent in the first quarter, and increased in 21 of the 24 industries for which BEA prepares quarterly estimates (table 4). Earnings was the leading contributor to personal income growth in most states, including the four states with the fastest personal income growth — Texas, Louisiana, Kentucky, and North Dakota.

• Professional, scientific, and technical services was the leading contributor to the earnings increase in Texas (table 3).
• Construction was the leading contributor to the earnings increase in Louisiana.
• Health care and social assistance was the leading contributor to the earnings increase in Kentucky.
• Mining was the leading contributor to the earnings increase in North Dakota.

Nationally, earnings increased fastest in farming and mining (chart 1). Although neither industry contributed more than 0.2 of a percentage point to personal income growth nationally; both industries were important contributors to growth in several states.

• Farm earnings contributed half a percentage point or more to increases in personal income in nine states — Arkansas, Kansas, Mississippi, North Dakota, Montana, Idaho, Minnesota, Indiana, and Iowa.
• Mining earnings contributed half a percentage point or more to increases in personal income in seven states — North Dakota, Wyoming, Oklahoma, Alaska, Texas, New Mexico, and Colorado.

Property income. Property Income increased 3.3 percent in the second quarter of 2018, after increasing 3.6 percent in the first. Growth rates ranged from 3.7 percent in Arkansas to 2.9 percent in the District of Columbia.

Transfer receipts. Transfer receipts increased 4.1 percent in the second quarter of 2018, after increasing 6.6 percent in the first quarter. Growth rates ranged from 9.4 percent in Connecticut to -2.5 percent in the District of Columbia.

Gross Domestic Product by Metropolitan Area, 2017

Professional and Business Services Led Growth Across Metropolitan Areas in 2017

 

1. New York-Newark-Jersey City, NY-NJ-PA
2. LA/Anaheim
3. Chicago-Naperville-Elgin, IL-IN-WI
4. Dallas/Fort Worth ($536 B)
5. Washington-Arlington-Alexandria, DC-VA-MD-WV
6. San Francisco-Oakland-Hayward, CA
7. Houston-The Woodlands-Sugar Land, TX

Real gross domestic product (GDP) increased in 312 out of 383 metropolitan areas in 2017 according to statistics on the geographic breakout of GDP released today by the Bureau of Economic Analysis. The percent change in real GDP by metropolitan area ranged from 12.1 percent in Odessa, TX to -7.8 percent in Enid, OK (table 2).

Real GDP for U.S. metropolitan areas increased 2.1 percent in 2017, led by growth in professional and business services; wholesale and retail trade; and finance, insurance, real estate, rental, and leasing (table 3).

Highlights

• Professional and business services increased 3.5 percent across the nation's metropolitan areas. This industry contributed to growth in 317 metropolitan areas, most notably in Midland, MI which increased 9.5 percent.
• Wholesale and retail trade increased 3.2 percent. This industry contributed to growth in 323 metropolitan areas, and was the leading contributor to growth in Lakeland-Winter Haven, FL and Seattle-Tacoma-Bellevue, WA, which increased 2.4 percent and 5.2 percent, respectively.
• Finance, insurance, real estate, rental, and leasing increased 1.5 percent. This industry contributed to growth in 237 metropolitan areas, and made major contributions to growth in Wheeling, WV-OH and Athens-Clark County, GA, which increased 10.9 percent and 4.9 percent, respectively.
• Natural resources and mining increased 2.2 percent. Although this industry wasn't a large contributor overall, it did make significant contributions in several metropolitan areas. Notable increases in this industry occurred in Beckley, WV and Odessa, TX, which increased 9.6 percent and 12.1 percent, respectively.

Large Metropolitan Area Highlights

• Of the large metropolitan areas, those with population greater than two million, Austin-Round Rock, TX (6.9 percent) and Seattle-Tacoma-Bellevue, WA (5.2 percent) had the largest increases in real GDP. Increases in Austin-Round Rock, TX and Seattle-Tacoma-Bellevue, WA were led by increases in wholesale and retail trade.
• Real GDP in Houston-The Woodlands-Sugarland, TX was unchanged from the previous year making it the only large metropolitan area not to increase. Professional and business services subtracted the most from growth in Houston-The Woodlands-Sugarland, TX offsetting notable contributions from natural resources and mining and nondurable-goods manufacturing.

Small Metropolitan Area Highlights

• Of the small metropolitan areas, those with population less than two million, Odessa, TX (12.1 percent) and Elkhart-Goshen, IN (11.3 percent) had the largest increases in real GDP. Odessa, TX was led by an increase in natural resources and mining, while Elkhart-Goshen, IN was led by an increase in durable goods manufacturing.
• The largest decreases in real GDP for small metropolitan areas were Enid, OK (-7.8 percent) and Visalia-Porterville, CA (-6.6 percent). Natural resources and mining subtracted from growth in Enid, OK, while finance, insurance, real estate, rental, and leasing subtracted from growth in Visalia-Porterville, CA.

Updates to Gross Domestic Product by Metropolitan Area

In addition to the statistics presented in this news release, BEA also revised GDP by metropolitan area statistics for 2001–2016. This update incorporated revised GDP by state statistics published in May 2018 and revised earnings statistics from BEA's Local Area Personal Income published in November 2017. These statistics do not yet reflect the revised benchmark NIPA statistics released in July 2018.

More metropolitan area highlights can be found on the regional highlights pages that accompany this release.

Activities of U.S. Multinational Enterprises: 2016

Worldwide employment by U.S. multinational enterprises (MNEs) increased 0.4 percent to 42.3 million workers (preliminary) in 2016 from 42.1 million (revised) in 2015, according to statistics released by the Bureau of Economic Analysis on the operations and finances of U.S. parent companies and their foreign affiliates.

Employment in the United States by U.S. parents was nearly unchanged at 28.0 million workers in 2016. U.S. parents accounted for 66.3 percent of worldwide employment by U.S. MNEs, a decrease of 0.3 percentage points from 2015. Employment abroad by majority-owned foreign affiliates (MOFAs) of U.S. MNEs increased 1.2 percent to 14.3 million workers and accounted for 33.7 percent of employment by U.S. MNEs worldwide.

U.S. parents accounted for 22.3 percent of total private industry employment in the United States. Employment by U.S. parents was largest in manufacturing and retail trade. Employment abroad by MOFAs was largest in China, the United Kingdom, Mexico, India, and Canada.

Worldwide current-dollar value added of U.S. MNEs decreased 1.5 percent to $5.2 trillion. Value added by U.S. parents, a measure of their direct contribution to U.S. gross domestic product, was nearly unchanged at $3.9 trillion, representing 24.2 percent of total U.S. private industry value added. MOFA value added decreased to $1.3 trillion. Value added by MOFAs was largest in the United Kingdom, Canada, and Ireland.

Worldwide expenditures for property, plant, and equipment of U.S. MNEs decreased 7.6 percent to $856.9 billion. Expenditures by U.S. parents accounted for $657.5 billion and MOFA expenditures for $199.5 billion.

Worldwide research and development expenditures of U.S. MNEs increased 4.9 percent to $350.3 billion. U.S. parents accounted for expenditures of $296.9 billion and MOFAs for $53.5 billion.

Additional statistics on the activities of U.S. parent companies and their foreign affiliates including sales, balance sheet and income statement items, compensation of employees, trade in goods, and more are available on BEA’s website. More industry detail for U.S. parents and more industry and country detail for foreign affiliates are also available on the website and will be published in the September issue of the Survey of Current Business.

Updates to the statistics

Statistics for 2015 are revised to incorporate newly available and revised source data. Preliminary statistics for 2015 were released in November 2017 and highlighted in “Activities of U.S. Multinational Enterprises in 2015” in the December 2017 issue of the Survey of Current Business.

Updates to Statistics on 2015 Activities of U.S. Multinational EnterprisesBillions of dollars, except as noted

	U.S. Parents		MOFAs
	Preliminary estimate	Revised estimate	Preliminary estimate	Revised estimate
Number of employees (thousands)	28,302.2	28,045.6	14,124.1	14,081.0
Value added	3,961.3	3,949.2	1,357.5	1,358.8
Expenditures for property, plant, and equipment	700.5	712.6	229.4	214.8
Research and development expenditures	284.3	277.8	54.8	56.1

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

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

Exports, Imports, and Balance (exhibit 1)

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

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

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

Three-Month Moving Averages (exhibit 2)

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

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

Exports (exhibits 3, 6, and 7)

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

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

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

Imports (exhibits 4, 6, and 8)

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

  Net balance of payments adjustments decreased $0.1 billion.

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

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

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

Revisions

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

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

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

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

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

Direct Investment by Country and Industry: 2017

Direct Investment by Country and Industry: 2017

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

BOX._______

                Comprehensive Update of the National Income and Product Accounts

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

END BOX.______

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

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

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


Personal Income (table 8)

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

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

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

Updates for the first quarter of 2018

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

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

First Quarter 2018

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

 

Summary of historical updates

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

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

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

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

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

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

 

Real GDP (Table 1A)

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

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

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

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

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

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

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

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

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

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


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

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

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

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


Price measures (Table 4)

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

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


Income and saving measures (Table 1A)

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

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

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

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

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

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

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


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

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

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

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

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