Global| Jun 09 20061Q Debt Growth Fastest Y/Y Since 1999
by:Tom Moeller
|in:Economy in Brief
Summary
Growth in total credit market debt outstanding rose 10.2% (AR) last quarter. That was a modest slowdown from the 12.1% advance during 4Q but it was enough to lift the y/y rate of growth to 9.7%, its fastest since 1999. A jump in [...]
Growth in total credit market debt outstanding rose 10.2% (AR) last quarter. That was a modest slowdown from the 12.1% advance during 4Q but it was enough to lift the y/y rate of growth to 9.7%, its fastest since 1999.
A jump in borrowing by the Federal government continued to lead debt growth with a 14.0% (AR) advance last quarter, its fastest in a year.
Moving in the other direction, growth in household sector borrowing slowed to 9.1%, its slowest quarterly gain in a year following the 11.7% surge during all of 2005.Home mortgage obligations grew at a still firm 12.6% rate (14.7% y/y) but consumer credit fell at a 5.1% (AR, +2.5% y/y). Bank loans jumped 12.3% (50.0% y/y).
Business borrowing picked up a bit and grew at an 8.3% annual rate (6.3% y/y).
Household sector asset values rose at a 10.8% annual rate (10.4% y/y) during 1Q driven by a 10.1% (14.6% y/y) gain in the value of real estate holdings. Financial asset values rose 11.6% (8.7% y/y) due to a 40.5% (AR, 20.3% y/y) rise in the value of mutual fund shares. The value of corporate equities held directly ticked up 0.7% (-1.6% y/y).
The net worth of the US household sector last quarter rose 2.7% (10.1% y/y) to a record $53.830 trillion. The gain lifted the ratio of net worth to income to 5.79 times.
| Flow of Funds | % of Total | 1Q 06 (AR) |
4Q 05 (AR) |
Y/Y | 2005 | 2004 | 2003 |
|---|---|---|---|---|---|---|---|
| Total Credit Market Debt Outstanding | 10.2% | 12.1% | 9.7% | 8.9% | 8.5% | 9.1% | |
| Federal Government | 12% | 14.0% | 10.1% | 6.5% | 7.0% | 9.0% | 10.9% |
| Households | 28% | 9.1% | 13.2% | 12.3% | 11.7% | 11.3% | 11.4% |
| Nonfinancial Corp. Business | 14% | 8.3% | 6.1% | 6.3% | 5.5% | 3.7% | 2.3% |
| Financial Sectors | 32% | 11.0% | 14.9% | 9.8% | 8.3% | 7.9% | 10.0% |
| Net Worth: Households & Nonprofit Organizations (Trillions) | -- | $53.830 | $52.430 | -- | $52.430 | $48.470 | $44.206 |
| Tangible Assets | -- | $26.223 | $25.626 | 13.0% | $25.626 | $22.556 | $20.036 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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