Treasury Data on International Capital Flows

March 15, 2011

On a monthly basis, the U.S. Treasury Department releases statistics for capital movements involving the United States vis-a-vis the rest of the world.  These reports embody three different definitions of a net capital inflow, and each was smaller in January than in December or the fourth-quarter monthly pace.  Among long-term flows, there was scant change between December and January in net foreign buying of U.S. securities, but U.S. net purchases of foreign securities doubled to $22.8 billion in January from $10.9 billion in December.  The table below compares monthly movements in January for increasingly inclusive definitions (from def’n #1 to def’n 3) to the monthly averages in the final quarter of 2010 and the whole calendar year of 2010.

Blns of $ per month January 4Q10 2010
Definition #1 51.5 58.5 65.2
Definition #2 32.1 36.8 45.7
Definition #3 32.5 33.4 23.4
U.S. Trade Deficit -46.3 -38.9 -41.3

The final row shows the U.S. goods and services trade deficit per month, a significant component of the current account.  The Commerce Department will be releasing the fourth-quarter balance of payments tomorrow, which provides a comprehensive itemization of the current account and the capital flows that itemize such.  The advantage of the Treasury data, known as TIC, is that it’s more timely than the Commerce Department data and gets released more frequently.  However, January data received in mid-March is still far too old to be a useful guide to what’s happening now.

Copyright Larry Greenberg 2011.  All rights reserved.  No secondary distribution without express permission.



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