Recent Updates
- China: GDP (Q1)
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- more updates...
Economy in Brief
U.S. Housing Affordability Fell Back in February, but Still in Recent Range
The NAR U.S. Fixed Rate Mortgage Housing Affordability Index decreased 7.6% (-1.4% y/y) in February to 173.1...
European New Car Registrations Remarkably Strong Yet Forgettable
Car registrations are not going to be the only statistic that bears these dual and seemingly dueling characteristics...
U.S. Retail Sales Soar in March
Total retail sales including food service and drinking establishments increased 9.8% (27.7% y/y) during March...
U.S. Industrial Production Rebounded in March
Industrial production rebounded in March, rising 1.4% m/m (+1.0% y/y)...
U.S. Home Builder Index Edges Higher in April
The NAHB-Wells Fargo Composite Housing Market Index rose 1.2% to 83 during April...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Carol Stone December 10, 2015
Total borrowing in the U.S. decreased to $933 billion at a seasonally adjusted annual rate in Q3, according to the Financial Accounts of the U.S., which were released today by the Federal Reserve Board. This was less than half the pace of the $2.470 trillion in Q2, and it amounted to just 5.2% of GDP, down from Q2's 13.8%. All major sectors of the domestic economy as well as the foreign sector borrowed noticeably less in Q3.
The federal government needed only $22 billion at a seasonally annual rate in Q3, down from $350 billion in Q2. The actual budget deficit for that quarter was $122.5 billion, about the same as a year ago, but far smaller than the deficit for Q3 in prior recent years. So it's not surprising that seasonally adjusted borrowing by the federal government was quite moderate.
Household borrowing in Q3, at $211 billion, SAAR, was less than half the pace of Q2, $585 billion. Home mortgages increased $147 billion, SAAR versus Q2's $226 billion, and consumer credit rose at a $246 billion pace, compared to Q2's $286 billion. Other institutions, such as hedge funds, which are included in "households" because they are not covered by specific published source data, had net paydowns of about $172 billion in Q3 in depository institution and "other" loans.
Nonfinancial corporate business borrowing retreated to $343 billion, SAAR, in Q3 from $685 billion in Q2. Corporate bond issuance was $326 billion, SAAR, compared to Q2's $626 billion. Depository institution loans were paid down at a $60 billion annual rate after Q2's net borrowing of $73 billion. But commercial paper issuance did pick up, with a net increase of $68 billion, SAAR, after a net paydown of $50 billion in Q2 and net paydowns the previous two quarters as well.
The financial sector basically maintained its Q2 borrowing pace, $368 billion, with $324 billion in Q3.
Press reports of these Financial Accounts highlight household balance sheets and net worth. Despite households' reduced borrowing, their net worth fell to $78.2 trillion (not seasonally adjusted) at the end of Q3 from $80.3 trillion at mid-year. This was largely due to the stock market decline over the summer, which reduced holdings of equities by $1.45 trillion (actual quarterly amount, not seasonally adjusted), the second largest quarterly decline ever. The largest was $1.50 trillion in Q1 2008.
The summer's stock price decline also cut the net wealth of the total economy. The Fed's recently devised measure, "U.S. net wealth" fell $2.12 trillion (not seasonally adjusted quarterly rate) as the overall market value of domestic corporations fell $2.54 trillion. The value of nonfinancial assets held by various sectors did increase, while U.S. financial claims on the "rest of the world" decreased, that by $778 billion. The opposite item, foreign claims on U.S. assets, also fell, by $489 billion, its first decline since Q3 2011 and the largest since Q1 2009, in the midst of the financial crisis.
The Financial Accounts data are in Haver's FFUNDS database. Associated information is compiled in the Integrated Macroeconomic Accounts produced jointly with the Bureau of Economic Analysis (BEA); these are carried in Haver's USNA database.
Financial Accounts (SAAR, Bil.$) | Q3'15 | Q2'15 | Q1'15 | 2014 | 2013 | 2012 | 2011 |
---|---|---|---|---|---|---|---|
Total Borrowing* | 933 | 2470 | 1254 | 2326 | 2127 | 1732 | 1168 |
Federal Government | 22 | 350 | -156 | 736 | 857 | 1181 | 1139 |
Households | 211 | 585 | 254 | 418 | 235 | 260 | -71 |
Nonfinancial Corporate Business | 343 | 685 | 620 | 494 | 446 | 346 | 355 |
Financial Sectors | 325 | 368 | -151 | 343 | 275 | -387 | -318 |