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U.S. International Transactions, First Quarter 1999.

The international transactions accounts have been revised to reflect the incorporation of methodological and statistical improvements. In addition, some types of transactions have been reclassified, and some table formats have been changed. For a discussion of these changes, see "U.S. International Transactions, Revised Estimates for 1982-98" in this issue.

THE U.S. current-account deficit--the balance on trade in goods and services, the balance on income, and net unilateral current transfers--increased to $68.6 billion in the first quarter of 1999 from $61.7 billion (revised) in the fourth quarter of 1998 (table A, chart 1).(1) The increase was more than accounted for by a large increase in the deficit on goods that resulted from a decrease in exports and an increase in imports. Partly offsetting was a small increase in the surplus on services, a small decrease in the deficit on income, and a decrease in net unilateral current transfers.

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In the financial account, net recorded financial inflows--the difference between changes in U.S.-owned assets abroad and changes in foreign-owned assets in the United States--were $84.1 billion in the first quarter, down from $99.2 billion (revised) in the fourth. Financial inflows for foreign-owned assets in the United States slowed sharply, and transactions in U.S.-owned assets abroad shifted to financial inflows.

The statistical discrepancy--errors and omissions in recorded transactions--was a negative $15.7 billion in the first quarter, compared with a negative $37.7 billion in the fourth.

The following are highlights for the first quarter of 1999:

* Exports of goods decreased sharply after a fourth-quarter surge, and imports of goods continued to increase.

* Direct investment income receipts and payments both increased, and other income receipts and payments changed little or decreased.

* Net U.S.-owned assets abroad decreased for the first time since the second quarter of 1991.

* U.S. transactions in foreign securities shifted to net sales from substantial net purchases in the fourth quarter that resulted from two large fourth-quarter acquisitions of U.S. companies by foreign companies through exchanges of stock. Net foreign purchases of U.S. securities slowed as a result of a shift to net foreign sales of U.S. Treasury securities.

* U.S. banks' claims on foreigners and U.S. banks' liabilities to foreigners both decreased for the second consecutive quarter. The first-quarter decreases largely reflected the reduction of positions with U.S. banks' own foreign offices.

U.S. dollar in exchange markets

In the first quarter, the U.S. dollar appreciated 1 percent on a nominal, trade-weighted quarterly average basis against a group of 26 currencies of important U.S. trading partners (table B, chart 2). Within the broad group, the dollar was unchanged against a group of 7 currencies that trade widely in international markets, including the Canadian dollar, the euro, the Japanese yen, the British pound, the Swiss franc, the Australian dollar, and the Swedish krona. The dollar appreciated 2 percent against a group of the remaining 19 currencies, including the currencies of U.S. trading partners in Latin America, Asia, the Middle East, and Eastern Europe (see table B for definitions). Trading conditions in foreign exchange markets stabilized in the first quarter after being disrupted in the third and fourth quarters of 1998 by uncertainties related to the financial problems in Russia and Brazil.

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On January 1, 1999, the third stage of the European Economic and Monetary Union began with the introduction of the euro as the currency used in financial markets by the 11 third-stage countries. The U.S. dollar appreciated against the euro throughout most of the first quarter, partly as a result of the disparity between the prospects for economic growth in the United States and in the euro area countries. Data released during the quarter indicated that the U.S. economy continued to grow strongly, but that the euro area economy remained relatively weak. The spread between future U.S. and euro area short-term interest rates implied by futures market prices widened in favor of the dollar, partly as a result of a growing belief in financial markets that the disparity between economic growth prospects would lead to a tightening of monetary conditions in the United States relative to those in the euro area.

The dollar appreciated against the Japanese yen throughout much of the first quarter, partly as a result of the disparity between the outlook for economic growth in the United States and in Japan. In the United States, indications of economic strength were partly responsible for a sharp rise in long-term interest rates. In Japan, indications of continuing economic contraction were partly responsible for a lowering of short-term interest rates to nearly zero. In addition, Japanese long-term interest rates began to decline midway through the quarter after rising sharply since the fourth quarter. The combination of the &dine in Japanese long-term interest rates and the rise in U.S. long-term interest rates increased the relative attractiveness of investing in U.S. bonds and supported the dollar's appreciation.

The Brazilian real was devalued on January 13 despite the announcement in late 1998 of a financial assistance package for Brazil by the International Monetary Fund. Because financial market participants had already reduced Brazilian positions, reaction to the devaluation was restrained, compared with the reaction to other recent disturbances in emerging markets. Spreads on emerging market bonds over U.S. Treasury bonds widened immediately after the devaluation but narrowed by the end of the quarter. However, spreads remained elevated from levels that existed before the Russian currency devaluation and debt moratorium in August 1998.

Current Account

Goods and services

The deficit on goods and services increased to $53.8 billion in the first quarter from $43.3 billion in the fourth. The increase was attributable to an increase in the deficit on goods, to $74.2 billion from $63.6 billion. The surplus on services edged up to $20.4 billion from $20.3 billion.

Goods.--The deficit on goods increased $10.6 billion, to $74.2 billion, in the first quarter. The increase resulted from a decrease in exports and an increase in imports.

Exports.--Exports decreased $5.8 billion, or 4 percent, to $164.3 billion in the first quarter. Quantities decreased 3 percent, and prices decreased x percent (table C).(2) The value of exports declined to essentially the same level as in the third quarter of 1998, following a fourth-quarter surge.

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In the first quarter, nonagricultural exports decreased $4.1 billion, or 3 percent, to $152.5 billion; quantities decreased 2 percent, and prices changed little. In value, nearly all major commodity categories decreased. Most of the decrease in capital goods was attributable to a drop in civilian aircraft, which had surged in the last two quarters of 1998; oil drilling, mining, and construction machinery decreased sharply after moderate declines in the previous five quarters, and semiconductors increased strongly for the third consecutive quarter. Nonagricultural industrial supplies and materials decreased, mostly as a result of declines in nonmonetary gold, in fuel products, and in chemicals. Automotive products decreased, following a fourth-quarter surge that was mostly attributable to the resumption of full production after a North American auto strike.

Agricultural exports decreased 81.8 billion, or 13 percent, to 811.8 billion; quantities decreased n percent, and prices decreased 2 percent. In value, most of the decrease was accounted for by declines in raw cotton and in soybeans. The decline in raw cotton was particularly steep, partly as a result of a fall in demand and the depletion of funds available to support U.S. cotton exports under a U.S. Government program.

Imports.--Imports increased $4.8 billion, or 2 percent, to $238.5 billion in the first quarter. Quantities increased 3 percent, and prices decreased i percent (table C). The value of nonpetroleum imports continued to rise, and the value of petroleum imports continued to fall.

Nonpetroleum imports increased $5.6 billion, or 2 percent, to 8227.9 billion; quantities increased 3 percent, and prices changed little. In value, more than half of the increase was accounted for by automotive products, which increased as a result of increases in passenger cars, mostly from Canada and Japan, and in trucks, buses, and special purpose vehicles, mostly from Canada and Mexico. Consumer goods were boosted by a surge in nondurable goods, particularly medical, dental and pharmaceutical preparations from Western Europe. In capital goods, there were strong increases in computers, peripherals, and parts, in semiconductors, and in telecommunications equipment. In contrast, nonpetroleum industrial supplies and materials decreased, partly as a result of a sharp decline in iron and steel products for the second consecutive quarter.

Petroleum imports decreased $0.9 billion, or 8 percent, to $10.6 billion (chart 3). The decrease was attributable to a decline in prices, which fell from an average of $11.40 per barrel to $10.38, the lowest quarterly level since the first quarter of 1974. The value and average price of petroleum imports have decreased by about 50 percent since the fourth quarter of 1996. In the first quarter, the average number of barrels imported daily increased to 11.20 million from 11.01 million.

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Balances by area.--The deficit on goods with Latin America and Other Western Hemisphere increased 84.6 billion, to 86.1 billion, in the first quarter, largely as a result of an increase in the deficit with Mexico and a decrease in the surplus with Brazil.(3) The deficit with Asia, excluding Japan, increased $4.2 billion, to 831.9 billion, and the deficit with Canada increased 83.6 billion, to $9.0 billion. In contrast, the deficit with Western Europe decreased $2.5 billion, to $8.5 billion, and the deficit with Japan decreased $0.1 billion, to $17.6 billion.

Services.--The surplus on services increased $0.1 billion, to $20.4 billion, in the first quarter. Receipts increased to $67.8 billion from $66.8 billion, and payments increased to $47.4 billion from $46.5 billion.

Travel receipts increased to $18.1 billion from $17.9 billion. The small increase was largely attributable to a rise in the number of overseas visitors to the United States. Travel payments increased to $14.6 billion from $14.1 billion as a result of a rise in payments to overseas countries and to Canada.

Passenger fare receipts edged up to $4.9 billion from $4.8 billion, and passenger fare payments edged up to $5.2 billion from $5.1 billion.

"Other" transportation receipts were virtually unchanged at $6.6 billion; both port expenditure receipts and freight receipts changed little. "Other" transportation payments were unchanged at $7.8 billion; a small decrease in freight payments was offset by a small increase in port expenditure payments.

Receipts for "other" private services increased to $24.1 billion from $23.2 billion. The increase was more than accounted for by a rise in receipts for business, professional, and technical services. Payments for "other" private services edged up to $12.4 billion from $12.3 billion.

Income

The deficit on income decreased to $4.7 billion in the first quarter from $4.9 billion in the fourth. Income receipts increased to $64.1 billion from $63.1 billion, and income payments increased to $68.9 billion from $68.0 billion.

Investment income.--Receipts of investment income on U.S.-owned assets abroad increased to $63.7 billion from $62.6 billion, and payments of investment income on foreign-owned assets in the United States increased to $67.0 billion from $66.2 billion.

Receipts of income on U.S. direct investment abroad increased to $27.0 billion from $25.6 billion. The increase was largely accounted for by increases in the earnings of finance affiliates, mostly in Latin America, and of banking affiliates, mostly in Europe and the Caribbean. Earnings of petroleum affiliates rose slightly, but remained depressed, partly as a result of low crude oil prices. Earnings of manufacturing affiliates edged up.

Payments of income on foreign direct investment in the United States increased to $12.4 billion from $11.1 billion. The increase was largely accounted for by increases in the earnings of manufacturing affiliates, particularly those owned by Western European and Canadian companies, and of insurance affiliates. Earnings of banking affiliates decreased, largely as a result of a decline in the earnings of Japanese-owned affiliates.

"Other" private income receipts decreased to $35.8 billion from $36.0 billion. Decreases in receipts of interest on bank and nonbank claims, resulting mostly from a decline in average yields, more than offset an increase in receipts on foreign securities.

"Other" private income payments decreased to $31.9 billion from $32.4 billion. Decreases in payments of interest on bank and nonbank liabilities, which resulted from declines in average liabilities outstanding and in average yields, more than offset an increase in payments on U.S. securities. U.S. Government income receipts decreased to $0.9 billion from $1.0 billion, and U.S. Government income payments were unchanged at $22.7 billion.

Compensation of employees.--As part of this year's annual revision of the U.S. international transactions accounts, compensation of employees has been reclassified to the income account from the services account to reflect the fact that compensation of employees is more appropriately classified as a return on a factor of production. For more information on the reclassification, see "U.S. International Transactions, Revised Estimates for 1982-98" in this issue.

In the first quarter, receipts for employee compensation were unchanged at $o.5 billion, and payments for employee compensation edged higher to $1.9 billion from $1.8 billion.

Unilateral current transfers

Unilateral transfers, which were previously shown in the current account, have been split into unilateral current transfers and unilateral capital transfers. Unilateral current transfers remain in the current account. Unilateral capital transfers which are transfers of existing assets or claims and so do not reflect current production--have been reclassified to, but are not shown separately in, the newly defined capital account. For more information, see "U.S. International Transactions, Revised Estimates for 1982-98" in this issue.

In the first quarter, net unilateral current transfers were $10.1 billion, compared with $13.5 billion in the fourth. The decrease was more than accounted for by a decline in U.S. Government grants, which were boosted in the fourth quarter, by grants to Israel.

Capital Account

The capital account is a newly defined account that is intended to capture capital transfers of existing assets and claims and the acquisition and disposal of nonproduced non financial assets. For more information, see "U.S. International Transactions, Revised Estimates for 1982-98" in this issue.

In the first quarter, net capital account transactions--which consist mainly of debt forgiveness and transfers of goods and financial assets by migrants as they enter or leave the country--were unchanged at $0.2 billion.

Financial Account

The financial account had previously been shown as the capital account. For more information, see "U.S. International Transactions, Revised Estimates for 1982-98" in this issue.

In the first quarter, net recorded financial inflows were $84.1 billion, down from $99.2 billion in the fourth. Financial inflows for foreign-owned assets in the United States slowed sharply, and transactions in U.S.-owned assets abroad shifted to financial inflows.

U.S.-owned assets abroad

Net U.S.-owned assets abroad decreased $9.2 billion in the first quarter, in contrast to an increase of $50.6 billion in the fourth. The shift to financial inflows was more than accounted for by a shift to net U.S. sales of foreign securities from large net U.S. purchases. Fourth-quarter net U.S. purchases of foreign securities were boosted by two exceptionally large acquisitions of U.S. companies by foreign companies through exchanges of stock.

U.S. official reserve assets.--Net U.S. official reserve assets decreased $4.1 billion in the first quarter, in contrast to an increase of $2.4 billion in the fourth (table D). The first-quarter decrease was largely attributable to payments of U.S. dollars by foreign countries to the International Monetary Fund (IMF) that exceeded the demand for U.S. dollars through IMF member drawings, which reduced the U.S. reserve position in the IMF. In a transfer of assets that had no net effect on U.S. official reserve assets, the United States paid in euros the equivalent value of $3.7 billion from U.S. foreign currency reserves to the IMF in exchange for an equal increase in the U.S. reserve position in the IMF; the payment of euros satisfied the U.S. portion of an IMF quota increase that must be paid in foreign currency reserve assets.

Table D.--Selected Transactions with Official Agencies
[Millions of dollars]

 1997 1998 1997
 I II

Changes in foreign official
 assets in the United
 States, net (decrease -)
 (table 1, line 56) 18,119 -21,684 27,524 -6,177
 Industrial countries(1) 10,200 -7,025 17,910 6,561
 Members of OPEC(2) 12,124 -11,499 7,137 1,673
 Other countries -4,205 -3,160 2,477 -14,411

Changes in U.S. official -1,010 -6,784 4,480 -236
 reserve assets, net
 (increase -) (table 1,
 line 41)

Activity under U.S. official
 reciprocal currency
 arrangements with foreign
 monetary authorities:(3)

 Foreign drawings, or -3,500 ... -3,500 ...
 repayments (-), net

 Drawings ... ... ... ...
 Repayments -3,500 ... -3,500 ...

 1997 1998
 III IV I II

Changes in foreign official
 assets in the United
 States, net (decrease -)
 (table 1, line 56) 23,260 -26,488 11,004 -10,551
 Industrial countries(1) 4,729 -19,000 -56 -9,740
 Members of OPEC(2) 4,224 -910 -1,257 -657
 Other countries 14,307 -6,578 12,317 -154

Changes in U.S. official -730 -4,524 -444 -1,945
 reserve assets, net
 (increase -) (table 1,
 line 41)

Activity under U.S. official
 reciprocal currency
 arrangements with foreign
 monetary authorities:(3)

 Foreign drawings, or ... ... ... ...
 repayments (-), net

 Drawings ... ... ... ...
 Repayments ... ... ... ...

 1999 Change:
 1998 1998
 IV-1999
 III IV I(p) I

Changes in foreign official
 assets in the United
 States, net (decrease -)
 (table 1, line 56) -46,489 24,352 8,568 -15,784
 Industrial countries(1) -6,174 8,945 3,679 -5,266
 Members of OPEC(2) -11,642 2,057 4,730 2,673
 Other countries -28,673 13,350 159 -13,191

Changes in U.S. official -2,026 -2,369 4,068 6,437
 reserve assets, net
 (increase -) (table 1,
 line 41)

Activity under U.S. official
 reciprocal currency
 arrangements with foreign
 monetary authorities:(3)

 Foreign drawings, or ... ... ... ...
 repayments (-), net

 Drawings ... ... ... ...
 Repayments ... ... ... ...


(p) Preliminary.

(1.) Western Europe, Canada, Japan. Australia, New Zealand, and South Africa.

(2.) Based on data for Ecuador, Venezuela, Indonesia, and other Asian and African oil-exporting countries. Excludes Ecuador beginning January 1993 and Gabon beginning January 1995.

(3.) Consists of transactions of the Federal Reserve System and the U.S. Treasury Department's Exchange Stabilization Fund.

Claims reported by banks.--U.S. claims on foreigners reported by U.S. banks decreased $35.2 billion in the first quarter, following a decrease of $37.2 billion in the fourth. In the first quarter, U.S. claims on foreigners in most areas of the world decreased, partly as a result of weak foreign demand for external bank credit, the curtailment of lending by U.S. banks to emerging market countries, and an increase in the attractiveness to U.S. banks of investing in long-term U.S. Government securities, which increased in yield during the quarter, rather than extending bank loans at short-term interest rates.

Banks' own claims payable in dollars decreased $39.6 billion, following a decrease of $33.7 billion. The first-quarter decrease was more than accounted for by the repayment of borrowings by foreign banks to U.S. banks. U.S. claims on foreign public borrowers increased, partly as a result of lending by U.S. securities brokers and dealers to public borrowers in Western Europe and Asia.

Banks' own claims payable in foreign currencies increased $5.8 billion, following an increase of $4.1 billion. The first-quarter increase was more than accounted for by increases in claims on Western Europe and on the Caribbean.

Banks' domestic customers' claims decreased $1.4 billion, following a decrease of $7.6 billion. In the first quarter, an increase in banks' domestic customers' dollar deposits abroad was more than offset by decreases in customers' other claims.

Foreign securities.--Net U.S. sales of foreign securities were $8.5 billion in the first quarter, following net purchases of $70.8 billion in the fourth quarter that included two exceptionally large acquisitions of U.S. companies by foreign companies through exchanges of stock. If the effects of these exchanges are excluded, net U.S. sales of foreign stocks of $8.3 billion in the first quarter are about a third greater than net U.S. sales in the fourth quarter. Net U.S. sales of foreign bonds were $0.1 billion, down from $8.6 billion.

Net U.S. sales of foreign stocks continued for the third consecutive quarter. In the first quarter, net U.S. sales of foreign stocks in European markets increased, partly as a result of U.S. investors' concerns that economic growth in some euro area countries remained weak and that the depreciation of the euro against the dollar would lead to capital losses. In contrast, net U.S. purchases from Japan accelerated, as Japanese stock prices rose sharply amid indications that Japanese companies were intensifying their restructuring efforts. Net U.S. purchases of other Asian stocks increased modestly.

Net U.S. sales of foreign bonds were small, following moderate net sales in the last two quarters of 1998, and gross trading volume continued to decline from levels reached at the peak of last year's global financial market turmoil. In the first quarter, new foreign issues in the United States were restrained by rising U.S. long-term interest rates and by the absence of borrowers from Western Europe. Issuance by emerging market countries picked up, partly as a result of an increase in borrowing by Latin American governments; issuance by corporations from emerging markets remained depressed. Net U.S. sales of outstanding bonds slowed, partly as a result of a shift to net U.S. purchases from Japan.

Direct investment.--Net financial outflows for U.S. direct investment abroad were $38.3 billion in the first quarter, up from $30.8 billion in the fourth. The increase was largely accounted for by an increase in net equity outflows that partly resulted from acquisitions of manufacturing companies in Western Europe and from equity outflows to existing foreign affiliates in Australia, Indonesia, and Thailand. Reinvested earnings increased as a result of a rise in affiliate earnings. In contrast, net intercompany debt outflows decreased.

Foreign-owned assets in the United States

Net foreign-owned assets in the United States increased $74.9 billion in the first quarter, following an increase of $149.8 billion in the fourth. The sharp slowdown in financial inflows was more than accounted for by a drop in net inflows for foreign direct investment in the United States, which were boosted in the fourth quarter by the two exceptionally large acquisitions of U.S. companies by foreign companies. First-quarter inflows were also slowed by a shift to net foreign sales of U.S. Treasury securities and by a smaller increase in net foreign official assets in the United States in the first quarter than in the fourth.

Foreign official assets.--Net foreign official assets in the United States increased $8.6 billion in the first quarter, following an increase of $24.4 billion in the fourth (table D). The fourth-quarter increase was mostly accounted for by increases in assets of industrial countries and of a few members of OPEC.

Liabilities reported by banks.--U.S. liabilities to foreigners reported by U.S. banks, excluding U.S. Treasury securities, decreased $14.5 billion in the first quarter, following a decrease of $21.8 billion in the fourth. The first-quarter decrease partly reflected weak U.S. and foreign demand for bank credit, the availability of adequate funding for U.S. banks from domestic sources, and an increase in the attractiveness to foreigners of investing in long-term bonds, which increased in yield during the quarter, rather than investing in short-term bank deposits.

Banks' own liabilities payable in dollars decreased $9.2 billion, following a decrease of $27.2 billion. The first-quarter decrease was mostly attributable to the repayment of borrowings by foreign-owned banks in the United States to their own offices in Japan, the Caribbean, and the United Kingdom. U.S. liabilities to nonbank private foreigners increased, partly as a result of borrowing by U.S. brokers and dealers through repurchase agreements with bond mutual funds in the Caribbean.

Bank-reported liabilities payable in foreign currencies increased $4.3 billion, following an increase of $4.5 billion. The first-quarter increase was mostly accounted for by increases in liabilities to Western Europe and to the Caribbean.

Banks' custody liabilities payable in dollars decreased $9.7 billion, in contrast to an increase of $o.9 billion.

U.S. Treasury securities.--Net foreign transactions in U.S. Treasury securities shifted to net foreign sales of $11.4 billion in the first quarter from net foreign purchases of $24.4 billion in the fourth. U.S. Treasury bond prices declined in the first quarter, as yields rose from the historically low levels reached in the fourth quarter. The decline in prices was partly attributable to investors' concerns that U.S. inflation might soon accelerate and to an easing of tensions in financial markets that reduced the demand for U.S. Treasury securities as safe and liquid investments. Net foreign purchases of short-term U.S. Treasury securities decreased sharply to $1.5 billion from a record $16.9 billion. Net foreign transactions in long-term U.S. Treasury securities shifted to net foreign sales of $12.9 billion from net foreign purchases of $7.5 billion. Net sales of long-term securities by some Asian investors were partly attributable to an increase in the returns available on Japanese securities and to portfolio rebalancing at the end of the Japanese fiscal year. Net sales by the Caribbean accelerated, and net sales by Western Europe slowed sharply.

Other U.S. securities.--Net foreign purchases of U.S. securities other than U.S. Treasury securities increased to $59.5 billion in the first quarter from $49.3 billion in the fourth. Net foreign purchases of U.S. stocks were $9.4 billion, up from $8.4 billion, and net foreign purchases of U.S. corporate and other bonds were $50.1 billion, up from $40.9 billion.

The increase in net foreign purchases of U.S. stocks was partly attributable to a rise in U.S. stock prices. Net foreign purchases by Western Europe increased sharply, partly reflecting the attractiveness of continued strong U.S. economic growth relative to the weaker growth in some European countries. In contrast, transactions by Japanese investors shifted to net sales, partly as a result of a surge in Japanese stock prices that boosted the attractiveness of investing in Japanese equities. Transactions by the Caribbean also shifted to net sales.

The acceleration in net foreign purchases of U.S. corporate and other bonds was largely attributable to an increase in net foreign purchases of U.S. federally sponsored agency bonds. A shift to net purchases of agency bonds by the Caribbean more than offset decreases in net purchases by Western Europe and by Japan. New issues sold abroad by U.S. corporations were relatively weak for the second consecutive quarter as a result of curtailed issuance by nonbank financial corporations. Net foreign purchases of other U.S. bonds remained strong, partly reflecting the attractive spreads available on U.S. corporate bonds in an environment of improving liquidity for U.S. corporate issues.

U.S. currency.--Net outflows of U.S. currency were $2.4 billion in the firs/quarter, down from $6.3 billion in the fourth.

Direct investment.--Net financial inflows for foreign direct investment in the United States fell sharply to $19.1 billion in the first quarter from $120.5 billion in the fourth, when they were boosted by the two exceptionally large acquisitions of U.S. companies by foreign firms. First-quarter net equity inflows decreased to their lowest level since the second quarter of 1995, and net intercompany debt inflows also declined. These decreases were partly offset by an increase in reinvested earnings.

Tables 1 through 10a follow.

[TABULAR DATA 1-10 NOT REPRODUCIBLE IN ASCII]

Revisions to the Estimates for the Fourth Quarter of 1998

The preliminary current-account balance and component estimates for the fourth quarter of 1998 were revised to incorporate improved methodologies, newly available source data, and changes to the presentation of the accounts (see "U.S. International Transactions, Revised Estimates for 1982-1998" in this issue). The current-account deficit for the fourth quarter was revised to $61.7 billion from $63.8 billion. The goods deficit was revised to $63.6 billion from $62.3 billion (based on new seasonal factors and updated Census Bureau data). The services surplus was revised to $20.3 billion from $19.3 billion (based on improved methodologies, newly available source data, and the reclassification of employee compensation). The deficit on income was revised to $4.9 billion from $7.8 billion (based on updated survey data, updated capital flow and position data, improved estimates of the current-cost adjustment, and the reclassification of employee compensation). Net unilateral current transfers were revised to $13.5 billion from $13.0 billion (based on improved methodologies, newly available source data, and the reclassification of capital transfers).

Net financial inflows and their components were revised to $99.2 billion from $94.3 billion.

New Indexes of Foreign Currency Price of the U.S. Dollar

The Federal Reserve Board has developed new summary indexes of the foreign exchange value of the U.S. dollar to replace the G-10 index. The new indexes provide better measures of U.S. trade competitiveness because they include a broader set of currencies and because they are adjusted for the effects of inflation. The new indexes also use a weighting scheme that better measures the competitiveness of U.S. goods in U.S. and foreign markets and that takes into account the changing structure of trade patterns and exchange rates. Separate indexes for the broadest group of currencies, for the major international currencies, and for the other currencies included in the broadest group have been developed. The nominal indexes for the three groups--which have moved in mostly the same direction in recent years, but which have diverged over periods in the past--are useful for the analysis of short-term developments in foreign exchange markets.

Data Availability

The current and historical estimates that are presented in tables 1-10a of the U.S. international transactions accounts are available as compressed files on BEA'S Web site at <www.bea.doc.gov>; click on Catalog of Products, and look under International Accounts Products, Balance of Payments.

The estimates are also available from BEA on the following diskettes:

* U.S. International Transactions. The most recently released annual and quarterly estimates are available as a a-year subscription (four installments)--product number IDS-0001, price $80.00. The subscription also includes the diskette of the historical estimates (see below).

* U.S. International Transactions, First Quarter 1999. Annual estimates for 1996-1998 and quarterly estimates for 1997:I-1999:I on a single diskette--product number IDN-0236, price $20.00.

* U.S. International Transactions, Historical Series. All the available historical annual and quarterly estimates on a single diskette--product number IDN-0237, price $20.00.

To order, call the BEA Order Desk at 1-800-704-0415 (outside the United States, call 202-606-9666).

(1) Quarterly estimates of U.S. current- and financial-account components are seasonally adjusted when statistically significant seasonal patterns are present. The accompanying tables present both adjusted and unadjusted estimates.

(2.) Quantity (real) estimates are calculated using a chain-type Fisher formula with annual weights for all years and quarters except for the most recent year, which is calculated using quarterly weights. Real estimates are expressed as chained (1992) dollars. Price indexes (1992=100) are also calculated using a chain-type Fisher formula.

(3.) Seasonally adjusted estimates for areas and countries are derived by applying seasonal factors for total U.S. agricultural and nonagricultural exports to the unadjusted agricultural and nonagricultural exports for areas and countries and by applying seasonal factors for total U.S. petroleum and nonpetroleum imports to the unadjusted petroleum and nonpetroleum imports for areas and countries. (The seasonal factors are derived from the seasonal adjustment of U.S. exports and U.S. imports by five-digit end-use commodity category.) The components are then summed to derive seasonally adjusted exports and imports for areas and countries.3
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Author:Weinberg, Douglas B.
Publication:Survey of Current Business
Geographic Code:1USA
Date:Jul 1, 1999
Words:5506
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