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Economy in Brief

Households' Net Worth Improved FurtherĀ 
by Tom Moeller December 9, 2004

The net worth of the US household sector rose 10.2% last quarter versus 3Q03. The year to year rate of increase is slower than the 14.4% gain in 1Q04.

The rise was driven by a 10.0% y/y rise in total asset values. Tangible asset values rose 13.1% y/y as the value of real estate holdings surged 15.4%. Financial asset values rose a lesser 8.2%, held back by higher interest rates which lowered the value of treasury issues by 19.1%. Money market share values also fell 11.6%. Higher prices in the stock market helped lift the value of mutual fund shares by 18.1% and the value of corporate equities held directly by 7.5%.

Foreign sector holdings of total US assets rose 20.7% y/y raising the foreign sector's ownership share of total US financial assets to an upwardly revised 12.7% versus 7.0% ten years ago.

Growth in total credit market debt outstanding was steady at 7.8%. The federal government and US households continued growing debt at or about a double digit rate and nonfinancial corporations' debt grew just 3.3%.

Total credit market debt owed by the household sector rose 9.8% y/y as home mortgage debt rose 11.5%. Consumer credit rose 4.3%.

Flow of Funds (Y/Y Chg.) % of Total 3Q04 2Q04 2003 2002 2001
Total Credit Market Debt Outstanding 7.8% 7.9% 8.6% 7.4% 7.2%
    Federal Government 12% 9.7% 10.6% 10.9% 7.6% -0.2%
    Households 28% 9.8% 9.7% 10.3% 9.6% 8.9%
    Nonfinancial Corporate Business 14% 3.3% 2.6% 3.5% 0.6% 5.0%
  Financial Sectors 32% 7.8% 8.7% 9.8% 9.0% 10.8%
Total Credit Market Assets 7.8% 7.9% 8.6% 7.4% 7.2%
  Household Sector 6% 8.2% 10.8% 14.1% -7.0% -4.2%
  Rest of World 13% 20.7% 18.5% 15.9% 16.4% 12.6%
  US Financial Sectors 77% 6.9% 6.8% 7.9% 7.6% 8.1%
Net Worth: Households & Nonprofit Organizations (Trillions) $46.7 $46.1 $44.7 $39.7 $41.3
  Tangible Assets $21.7 $20.8 $19.9 $18.2 $16.8
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