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Economy in Brief

US Flow of Funds: Households' Net Worth Rose
by Tom Moeller September 17, 2004

The net worth of the US household sector rose 11.1% last quarter versus 2Q03.

On the asset side of the ledger, a 10.8% y/y rise in total assets was driven by a 24.9% jump in the value of mutual fund shares and an 11.8% rise in the value of owner occupied real estate. These gains offset a 12.7% decline in money market shares and a 10.6% decline in the value of Treasury security holdings.

Total liabilities of the household sector rose 9.3% y/y with a notable 11.7% rise in home mortgages. Consumer credit rose 4.0%.

Growth in credit market debt outstanding was steady at 8.0%. The federal government and US households continued to borrow at a double digit rate as nonfinancial corporations only grew their financial liabilities at a 3.2% rate.

Foreign sector holdings of US assets continued to surge, raising the foreign sector's ownership of total US financial assets to 12.4% versus 7.0% ten years ago.

Flow of Funds (Y/Y Chg.) % of Total 2Q04 1Q04 2003 2002 2001
Total Credit Market Debt Outstanding 8.0% 8.6% 8.6% 7.4% 7.3%
    Federal Government 12% 10.6% 12.7% 10.9% 7.6% -0.2%
    Households 27% 10.0% 10.6% 10.5% 9.6% 9.0%
    Nonfinancial Corporate Business 14% 3.2% 3.9% 3.7% 0.7% 5.0%
  Financial Sectors 32% 8.6% 8.8% 9.7% 9.0% 10.7%
Total Credit Market Assets 8.0% 8.6% 8.6% 7.4% 7.3%
  Household Sector 6% 6.4% 3.1% 7.2% -4.5% -5.8%
  Rest of World 12% 18.5% 19.3% 15.9% 16.4% 12.6%
  US Financial Sectors 77% 6.8% 7.7% 7.9% 7.6% 7.9%
Net Worth: Households & Nonprofit Organizations (Trillions) $45.9 $45.3 $44.5 $39.6 $41.1
  Tangible Assets: Households $15.7 $15.3 $15.0 $13.6 $12.4
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