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Economy in Brief

U.S. Financial Account Shows Moderately Increased Borrowing in Q3
by Carol Stone  December 9, 2013

Federal Reserve financial accounts data (formerly known as the "flow of funds") for Q3 show the net volume of credit market borrowing at a $1.57 trillion annual rate, moderately larger than the $1.48 trillion in Q2. Q2 is mildly revised from $1.37 trillion reported in September. Q3's credit demand amounted to 9.3% of GDP, compared to 8.9% in Q2. This remains far smaller than a 20-year average ranging around 17-18%.

Federal government borrowing in Q3 was low again, at $174 billion, down from $300 billion in Q2 and compares to an average during the last five years of $1.24 trillion each quarter.  All these figures are quoted at seasonally adjusted annual rates.

Households and nonfinancial corporations both increased their borrowing in Q3.  Households used $393 billion, up from $105 billion in Q2 and a net liquidation of $86 billion in Q1.  Notably, they were net borrowers of mortgages in Q3, adding $87 billion in mortgage debt; it was the first net addition since Q1 2009 and, while seemingly small, the largest amount since Q1 2008.  Consumer credit borrowing picked up marginally to a $179 billion annual rate from $173 billion in Q2.  Within the consumer credit category, auto loans advanced at a $102 billion pace, extending a strengthening trend, and student loans picked up to $137 billion, continuing a sawtooth quarterly pattern.  Credit card debt was nearly flat, edging up just $3 billion, and "other" consumer credit was liquidated by about $63 billion.  Other types of depository institution loans to the household sector expanded $132 billion, up from $36 billion in Q2.

Nonfinancial corporations' borrowing was $830 billion in Q3, firming from Q2's $774 billion.  Of the Q2 amount, $729 billion was in corporate bonds, while borrowing from depository institutions continued to be sluggish, at just $57 billion, up trivially from Q2's $55 billion.

The Financial Accounts data are in Haver's FFUNDS database. Associated information is compiled in the Integrated Macroeconomic Accounts produced jointly with the Bureau of Economic Analysis (BEA); these are carried in Haver's USNA database.

Flow of Funds (SAAR, Bil.$) Q3'13 Q2'13 Q1'13 2012 2011 2010 2009
Total Credit Market Borrowing* 1571 1478 2163 1614 1070 590 -531
Federal Government 174 300 1169 1140 1068 1580 1444
Households 393 105 -86 28 -186 -380 -231
Nonfinancial Corporate Business 830 774 627 646 527 203 -147
Financial Sectors -35 56 -7 -396 -435 -932 -1809
*Includes state and local government and foreign sectors, not shown separately.
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