Net foreign capital inflows to U.S. jump

Net foreign capital inflows into the United States jumped 62 percent in November to $149.9 billion, reaching their highest level since January 2006.

The boost, reported by the U.S. Treasury Department Wednesday, signals a revival in foreign demand for U.S. securities and is a stark turnaround from August and September, when outside interest was dismal. Responding to the credit market crisis in August, foreigners were selling off their interest in U.S. long-term securities, leading to an outflow of $150.5 billion that month.

The strong data for November represent "a full 180-degree swing" from the peak of the credit market crisis in August, Global Insight U.S. Economist Brian Bethune said in commentary.
"Overall, this is a positive report, notwithstanding all of the negative news in the financial markets that seems to be grabbing the headlines in recent days."

Financial market analysts consider the Treasury's monthly Treasury International Capital report data to be a significant but imprecise gauge of how easily the United States can finance its trade deficit.

Read Complete Story