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Economy in Brief

Households' Net Worth Improved Further in 2Q 
by Tom Moeller September 21, 2005

In 2Q, the net worth of the US household sector improved 1.9% (9.4% y/y) to a record $49.8 trillion. The gain lifted net worth not to a historical high versus income, but the highest in four years (5.5 times).

Household sector asset values rose 9.7% y/y due to a 13.8% rise in the value of real estate holdings. Financial asset values rose 7.1%, still half the gain in 2003 and held back by higher interest rates which reduced the growth in Treasury security holdings to a negative 2.2% y/y. Money market share values also fell by 4.8%. Higher prices in the stock market helped lift the value of mutual fund shares by 14.0% but the value of corporate equities held directly fell 1.9%.

Growth in total credit market debt outstanding moved slightly higher to 8.5% y/y. Growth in the federal government debt slowed a bit to 7.3% y/y but US household debt growth continued strong at 10.6% y/y while non-financial corporations debt grew a faster 6.9% y/y.

Flow of Funds  % of Total 2Q 05 
(AR)
1Q 05
  (AR)
2004
 
2003
 
2002
 
Total Credit Market Debt Outstanding 7.9% 7.3% 8.2% 8.9% 7.7%
    Federal Government 12% -3.7% 15.9% 9.0% 10.9% 7.6%
    Households 28% 10.6% 9.7% 11.1% 10.4% 9.8%
    Nonfinancial Corporate Business 14% 7.3% 6.4% 4.8% 3.3% 0.6%
  Financial Sectors 32% 9.0% 4.7% 7.3% 10.3% 9.2%
Net Worth: Households & Nonprofit Organizations (Trillions) $49.8 $48.9 $48.3 $44.1 $39.1
  Tangible Assets $23.9 $23.2 $22.5 $20.0 $18.4
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