The U.S. net international investment position, which measures the difference between U.S. residents' foreign financial assets and liabilities, stood at –$22.52 trillion at the end of the second quarter of 2024. This information was released by the U.S. Bureau of Economic Analysis.
At the end of the first quarter, the net investment position was –$21.29 trillion, a revised figure. The change from the first to the second quarter amounted to –$1.23 trillion, influenced by net financial transactions of –$299.8 billion and other changes in position, such as price and exchange-rate fluctuations, totaling –$930.5 billion.
Price changes accounted for –$616.9 billion due to U.S. stock price increases outpacing those abroad, which raised the market value of U.S. liabilities more than assets.
Exchange-rate changes resulted in a decrease of –$214.8 billion as foreign currencies depreciated against the U.S. dollar, reducing the value of U.S. assets more than liabilities in dollar terms.
U.S. assets increased by $173.2 billion to reach $36 trillion by the end of Q2 2024, primarily driven by a $112.8 billion rise in financial derivatives, particularly single-currency interest rate contracts.
Portfolio investment and direct investment assets saw minimal change during this period due to offsetting effects from financial transactions and foreign stock price increases versus currency depreciation against the dollar.
On the liabilities side, there was an increase of $1.40 trillion bringing total liabilities to $58.52 trillion at quarter's end, largely driven by rising U.S. stock prices that elevated portfolio and direct investment liabilities' market values.
Foreign purchases of U.S stocks and long-term debt securities contributed significantly with financial transactions amounting to $391.1 billion.
Specifically, portfolio investment liabilities rose by $666.4 billion reaching $30.89 trillion while direct investment liabilities grew by $568.2 billion totaling $16.64 trillion due mostly to increased U.S stock prices.