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Economy in Brief

Households' Debt Usage Surged in 3Q 
by Tom Moeller December 12, 2005

Growth in credit market debt owed by the household sector jumped at a 13.3% rate last quarter, the strongest rate in a year. A 15.5% (13.2% y/y) jump in mortgage obligations lifted the figure but consumer credit also surged at an 8.7% rate (4.2% y/y), the strongest this year. These gains powered overall domestic nonfinancial debt growth to its fastest of the year, 9.8% (9.2% y/y)

Growth in the federal government debt also was firm at 6.9% y/y while non-financial corporations' debt grew a faster 7.7% y/y.

Household sector asset values rose 12.8% y/y due to a 14.1% rise in the value of real estate holdings. Financial asset values rose 9.8% due to a 19.0% rise in the value of mutual fund shares but the value of corporate equities held directly rose just 3.0%.

The net worth of the US household sector in 3Q improved 2.6% (10.9% y/y) to a record $51.1 trillion. The gain lifted net worth to a historic 5.6 times income.

Flow of Funds  % of Total 3Q 05 
(AR)
2Q 05
  (AR)
Y/Y 2004
 
2003
 
2002
 
Total Credit Market Debt Outstanding 8.7% 8.8% 8.7% 8.4% 8.8% 7.7%
    Federal Government 12% 6.6% -3.7% 6.9% 9.0% 10.9% 7.6%
    Households 28% 13.3% 12.0% 10.9% 11.2% 10.2% 9.7%
    Nonfinancial Corporate Business 14% 6.5% 8.7% 7.7% 5.2% 3.4% 0.5%
  Financial Sectors 32% 6.1% 10.7% 7.5% 7.5% 10.1% 9.2%
Net Worth: Households & Nonprofit Organizations (Trillions) $51.1 $49.8 $48.2 $43.9 $39.0
  Tangible Assets $20.8 $20.1 14.1% $18.7 $16.4 $15.0
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