Recent Updates

  • Japan: Help Wanted Advertisements (Mar), All Industry Activity Indexes, Labor Productivity (Feb)
  • Philippines: Public Finance (Mar); Thailand: Domestic Car Sales Press (Mar); China: Business Climate (Q4); Korea: Consumer Survey Index, Inflation Expectations (Apr), Trade Indexes (Mar); Bangladesh: IP (Dec); Taiwan: TIER Business Outlook (Mar)
  • US: Housing Starts by State and Region (Mar)
  • US: New Res Sales (Mar), S&P Case Shiller Home Price Indexes, FHFA
  • more updates...

Economy in Brief

U.S. Flow of Funds: Debt Growth Slowed, Household Net Worth Down
by Tom Moeller March 10, 2008

Credit market debt outstanding owed by all sectors of the economy grew 8.6% AR (8.9% y/y) during the fourth quarter of 2007. The gain was a marked slowdown from the strong 10.9% rise during 3Q.

Boosted by the growing budget deficit, the federal government's debt obligations grew 4.9% last year which was up from the 3.9% gain during 2006. Nevertheless, the y/y rise of 4.9% was about half the peak 10.9% rise during 2003.

Consumer credit debt growth slowed to a 5.7% quarterly rate of growth (6.8% y/y) from 7.0% during 3Q. For the year, the 6.8% rate of increase was nearly half the peak rate of 2003 and reflected the slowdown in consumer spending. Households' obligations on home mortgages grew just 5.0% (6.6% y/y) which again was half the gain four years earlier as home purchases tumbled. Conversely, credit card debt growth during the year sped up slightly to 5.5% from 3.9% during 2006. Bank loans nearly doubled during the year.

Credit market debt owed by the nonfinancial corporate business sector also sped up to a 11.1% y/y rate of growth which was the strongest in ten years. The non corporate business sector also generated a slight speedup in debt accumulation to a 12.9% rate.

Credit market debt owed by the financial sector accelerated as well to an 11.1% rate of growth which was the strongest gain since 2001. Liabilities at commercial banks grew 26.0% y/y, savings institutions by 34.6% and credit unions by nearly three quarters.

The net worth of the U.S. household sector last quarter deteriorated during 4Q to $57.2 trillion from the prior quarter's record level. The dollar level of household sector assets fell $307.6 billion pulled down by a $54.0 billion loss in tangible asset values (+2.8% y/y) and a $253.6 billion drop in financial values (+4.9% y/y). Liabilities grew $255.2 billion (6.8% y/y).

Assessing Employment Growth in 2007 from the Federal Reserve Bank of San Francisco can be found here.

Recent Trends in Economic Volatility: Conference Summary also from the Federal Reserve Bank of San Francisco is available here

Flow of Funds (Y/Y % Chg.) % of Total 4Q '07 3Q'07 2007 2006 2005
Total Credit Market Debt Outstanding -- 8.9 9.2 8.9 9.4 8.9
    Federal Government 11% 4.9 4.3 4.9 3.9 7.0
    Households 28% 6.8 7.3 6.8 10.2 11.1
    Nonfinancial Corporate Business 13% 11.1 10.8 11.1 8.0 4.8
    Nonfarm, NonCorporate Business 7% 12.9 12.4 12.9 12.5 13.6
  Financial Sectors 32% 11.1 11.4 11.1 10.0 8.5
             
Net Worth: Households & Nonprofit Organizations (Trillions) -- $57.718 $58.251 $57.718 $55.800 $51.580
  Tangible Assets: Households -- $26.760 $26.813 $26.760 $26.037 $24.427
   Financial Assets: Households -- $45.333 $45.587 $45.333 $43.218 $39.544
close
large image