U.S. International Investment Position, 3rd Quarter 2024

One take on the BEA report that I read was as follows:

“The US economy has had the strongest recovery from the COVID-19 pandemic of any major developed economy. Annual inflation is approaching the Federal Reserve’s target without a recession, non-managerial real wages have exceeded pre-pandemic trends, consumer spending is continuing to exceed expectations, investment in factories is at record levels, and the United States is a net exporter of petroleum products.

Against this backdrop, in January a new administration will take charge of government. Initial market response to the news was favorable, with the expectation that the new administration will be able to build on the economy’s strong foundations and unlock further growth. At the same time, there remains uncertainty around the potential implications of economic policies of the incoming administration.”

More as I get it.

U.S. International Investment Position, 3rd Quarter 2024, U.S. Bureau of Economic Analysis (BEA)

The U.S. net international investment position, the difference between U.S. residents’ foreign financial assets and liabilities, was –$23.60 trillion at the end of the third quarter of 2024, according to statistics released today by the U.S. Bureau of Economic Analysis (chart 1). Assets totaled $37.86 trillion, and liabilities were $61.46 trillion (chart 2). At the end of the second quarter, the net investment position was –$22.55 trillion (revised). The net investment position and components of assets and liabilities are presented in table 1.

The –$1.06 trillion change in the net investment position from the second quarter to the third quarter came from net financial transactions of –$479.5 billion and net other changes in position, such as price and exchange-rate changes, of –$577.2 billion (table 2).

Price changes of –$1.43 trillion reflected U.S. stock price increases that exceeded foreign stock price increases, which raised the market value of U.S. liabilities more than U.S. assets.

The impact of price changes was partly offset by exchange-rate changes of $936.0 billion, reflecting foreign currency appreciation against the U.S. dollar, which raised the value of U.S. assets more than U.S. liabilities in dollar terms.

U.S. assets increased by $1.78 trillion to a total of $37.86 trillion at the end of the third quarter, driven mainly by the appreciation of major foreign currencies against the U.S. dollar that raised the market value of assets in dollar terms. All major investment categories of assets increased, notably portfolio investment and direct investment assets (chart 3).

Portfolio investment assets increased by $786.2 billion to $16.87 trillion and direct investment assets increased by $563.5 billion to $11.90 trillion, reflecting exchange-rate changes of $630.3 billion and $322.5 billion, respectively (table 2).

U.S. liabilities increased by $2.83 trillion to a total of $61.46 trillion at the end of the third quarter, driven mainly by U.S. stock price increases that raised the market value of portfolio investment and direct investment liabilities (chart 4). Financial transactions of $716.7 billion, notably foreign purchases of U.S. debt and equity securities, also contributed to the overall increase in U.S. liabilities (table 2).

Portfolio investment liabilities increased by $1.59 trillion to $32.49 trillion, attributable to price changes of $1.08 trillion and financial transactions of $637.6 billion. Direct investment liabilities increased by $840.5 billion to $17.54 trillion, reflecting price changes of $733.6 billion (table 2).