The U.S. Bureau of Economic Analysis has released statistics indicating that the U.S. net international investment position was –$26.23 trillion at the end of the fourth quarter of 2024. This figure represents the difference between U.S. residents' foreign financial assets and liabilities, with assets totaling $35.89 trillion and liabilities reaching $62.12 trillion.
From the third to the fourth quarter, there was a change of –$2.08 trillion in the net investment position due to net financial transactions amounting to –$411.2 billion and other changes such as price and exchange-rate adjustments totaling –$1.67 trillion.
The report highlighted that "exchange-rate changes of –$1.18 trillion reflected major foreign currency depreciation against the U.S. dollar," which impacted the value of U.S. assets more than liabilities in dollar terms.
Price changes amounted to –$632 billion, attributed to declining asset prices while liability prices increased as foreign stock prices underperformed relative to those in the U.S.
U.S. assets saw a decrease of $1.77 trillion by the end of the fourth quarter, largely due to foreign currency depreciation against the dollar impacting all major investment categories like portfolio and direct investment assets.
Portfolio investment assets decreased by $734.6 billion, with direct investment assets reducing by $643.1 billion, primarily driven by exchange-rate changes.
Conversely, U.S. liabilities increased by $306.2 billion, influenced by financial transactions amounting to $402.8 billion, particularly from foreign purchases of U.S stocks and long-term debt securities.
The year-end figures for 2024 show a net international investment position of –$26.23 trillion compared to –$19.85 trillion at 2023's close.
A significant shift occurred over 2024 with a change of –$6.38 trillion in net investment position stemming from financial transactions worth –$1.27 trillion and other factors including price and exchange-rate shifts totaling –$5.11 trillion.
Price changes during this period reflected increases in U.S stock prices exceeding those abroad, thereby raising market values for liabilities more than for assets.
Additionally, exchange-rate fluctuations led to a depreciation impact on foreign currencies against the dollar affecting asset valuations negatively compared to liabilities.
Increases were noted across all major asset categories driven by rising foreign stock prices and financial activities despite being partially offset by unfavorable exchange rates.
U.S liabilities also rose significantly over 2024 fueled by increasing stock prices domestically which elevated liability market values alongside ongoing financial transactions predominantly involving long-term debt securities and stocks acquisitions by foreigners.