                                                                     For use at 12:00 p.m., eastern time
                                                                                              Thursday
                                                                                           June 5, 2008




FEDERAL RESERVE statistical release


Z.1




Flow of Funds Accounts
of the United States

Flows and Outstandings
First Quarter 2008




Board of Governors of the Federal Reserve System, Washington DC 20551

                                  Flow of Funds Summary Statistics
                                  CC




                                                 First Quarter 2008

         Debt of the domestic nonfinancial sectors is            industrial loans, and commercial mortgage lending.
estimated to have expanded at a seasonally adjusted
annual rate of 6 percent in the first quarter of 2008,                    State and local government debt increased at
one percentage point slower than in the previous                 an annual rate of 6 percent last quarter, 1 percentage
quarter.   The deceleration was widespread across                points less than in the previous quarter.        Federal
sectors.                                                         government debt expanded at an annual rate of
                                                                 9 percent in the first quarter.
         Household debt expanded at an annual rate of
3 percent in the first quarter, 2 percentage points                      At the end of the first quarter of 2008, the
below the pace in the previous quarter.          In the first    level of domestic nonfinancial debt outstanding was
quarter, growth of home mortgage debt decreased to an            $31.8 trillion; household debt was $14.0 trillion,
annual rate of 3 percent, less than half of the pace in          nonfinancial business debt was $10.3 trillion, and total
2007. Consumer credit rose at an annual rate of 5               government debt was $7.5 trillion.
percent in the first quarter, the same as the 2007 pace.
                                                                           Household net worth--the difference between
         Nonfinancial business debt rose at an annual            the value of assets and liabilities--was an estimated
rate of 9 percent in the first quarter, 1 percentage           $56.0 trillion at the end of the first quarter of 2008,
points less than in the previous quarter. The slowdown           $1.7 trillion dollars less than in the preceding quarter.
was evident in net bond issuance, commercial and


Growth of Domestic Nonfinancial Debt1
                                            P
                                                P




Percentage changes; quarterly data are seasonally adjusted annual rates
                                                                                    State and
                            Total            Households          Business                                   Federal
                                                                                   local govts.
 1998                         6.7                    7.8          11.8                  6.3                  -1.4
 1999                         6.3                    8.4          10.5                  3.4                  -1.9
 2000                         4.9                    9.1           9.0                  1.3                  -8.0
 2001                         6.3                    9.6           5.7                  8.8                  -0.2
 2002                         7.3                  10.8            2.4                11.0                    7.6

 2003                         8.1                  11.5            2.4                  8.3                  10.9
 2004                         8.8                  11.2            5.8                  7.4                   9.0
 2005                         9.2                  11.2            7.7                10.2                    7.0
 2006                         8.8                  10.2            9.7                  8.2                   3.9
 2007                         8.2                    6.8          11.7                  9.2                   4.9

 2007:Q1                      8.0                    7.0           9.4                11.2                    6.7
       Q2                     7.1                    7.2          11.0                10.3                   -1.4
       Q3                     9.1                    6.4          13.8                  6.5                   8.8
       Q4                     7.5                    6.1          10.8                  7.7                   5.1

 2008:Q1                      6.5                    3.5           9.2                  6.4                   9.5
1. Changes shown are on an end-of-period basis.

                                              Table of Contents



Title                                                                            Table     Page



Flow of Funds Accounts, First Quarter 2008                                                  1

Availability of Data for Latest Quarter                                                     3

Debt Growth by Sector                                                            D.1        6

Borrowing by Sector                                                              D.2        7

Debt Outstanding by Sector                                                       D.3        8




                                                                    Flows            Levels
Title                                                           Table    Page    Table     Page




Summaries

Total Net Borrowing and Lending in Credit Markets               F.1        9     L.1        58

Credit Market Borrowing by Nonfinancial Sectors                 F.2       10     L.2        59

Credit Market Borrowing by Financial Sectors                    F.3       10     L.3        59

Credit Market Borrowing, All Sectors, by Instrument             F.4       11     L.4        60

Total Liabilities and Its Relation to Total Financial Assets    F.5       11     L.5        60

Distribution of Gross Domestic Product                          F.6       12

Distribution of National Income                                 F.7       13

Saving and Investment                                           F.8       14

Net Capital Transfers                                           F.9       14

Derivation of Measures of Personal Saving                       F.10      15     L.10       61

                                                            Flows            Levels

Title                                                   Table    Page    Table     Page


Sectors

Households and Nonprofit Organizations                  F.100     16     L.100      62

Nonfinancial Business                                   F.101     17     L.101      63

         Nonfarm Nonfinancial Corporate Business        F.102     18     L.102      64

         Nonfarm Noncorporate Business                  F.103     19     L.103      65

         Farm Business                                  F.104     19     L.104      65

State and Local Governments                             F.105     20     L.105      66

Federal Government                                      F.106     21     L.106      66

Rest of the World                                       F.107     22     L.107      67

Monetary Authority                                      F.108     23     L.108      68

Commercial Banking                                      F.109     24     L.109      69

         U.S.-Chartered Commercial Banks                F.110     25     L.110      70

         Foreign Banking Offices in U.S.                F.111     26     L.111      71

         Bank Holding Companies                         F.112     27     L.112      72

         Banks in U.S.-Affiliated Areas                 F.113     27     L.113      72

Savings Institutions                                    F.114     28     L.114      73

Credit Unions                                           F.115     29     L.115      74

Property-Casualty Insurance Companies                   F.116     29     L.116      74

Life Insurance Companies                                F.117     30     L.117      75

Private Pension Funds                                   F.118     30     L.118      75

State and Local Government Employee Retirement Funds    F.119     31     L.119      76

Federal Government Retirement Funds                     F.120     31     L.120      76

Money Market Mutual Funds                               F.121     32     L.121      77

Mutual Funds                                            F.122     32     L.122      77

                                                        Flows            Levels

Title                                               Table    Page    Table     Page



Closed-End and Exchange-Traded Funds                F.123     32     L.123      77

Government-Sponsored Enterprises                    F.124     33     L.124      78

Agency- and GSE-backed Mortgage Pools               F.125     33     L.125      78

Issuers of Asset-Backed Securities                  F.126     34     L.126      79

Finance Companies                                   F.127     34     L.127      79

Real Estate Investment Trusts                       F.128     35     L.128      80

Security Brokers and Dealers                        F.129     36     L.129      81

Funding Corporations                                F.130     36     L.130      81




Instruments

Gold and Official Foreign Exchange Holdings         F.200     37     L.200      82

SDR Certificates and Treasury Currency              F.201     37     L.201      82

U.S. Deposits in Foreign Countries                  F.202     37     L.202      82

Net Interbank Transactions                          F.203     38     L.203      83

Checkable Deposits and Currency                     F.204     39     L.204      84

Time and Savings Deposits                           F.205     40     L.205      85

Money Market Mutual Fund Shares                     F.206     40     L.206      85

Federal Funds and Security Repurchase Agreements    F.207     41     L.207      86

Open Market Paper                                   F.208     41     L.208      86

Treasury Securities                                 F.209     42     L.209      87

                                                                     Flows             Levels

Title                                                           Table     Page    Table     Page



Agency- and GSE-backed Securities                               F.210     43      L.210      88

Municipal Securities and Loans                                  F.211     44      L.211      89

Corporate and Foreign Bonds                                     F.212     44      L.212      89

Corporate Equities                                              F.213     45      L.213      90

Mutual Fund Shares                                              F.214     45      L.214      90

Bank Loans Not Elsewhere Classified                             F.215     46      L.215      91

Other Loans and Advances                                        F.216     47      L.216      92

Total Mortgages                                                 F.217     48      L.217      93

         Home Mortgages                                         F.218     49      L.218      94

         Multifamily Residential Mortgages                      F.219     49      L.219      94

         Commercial Mortgages                                   F.220     50      L.220      95

         Farm Mortgages                                         F.221     50      L.221      95

Consumer Credit                                                 F.222     51      L.222      96

Trade Credit                                                    F.223     51      L.223      96

Security Credit                                                 F.224     51      L.224      96

Life Insurance and Pension Fund Reserves                        F.225     52      L.225      97

Taxes Payable by Businesses                                     F.226     52      L.226      97

Proprietors' Equity in Noncorporate Business                    F.227     52      L.227      97

Total Miscellaneous Financial Claims                            F.228     53      L.228      98

         Identified Miscellaneous Financial Claims - Part I     F.229     54      L.229      99

         Identified Miscellaneous Financial Claims - Part II    F.230     55      L.230     100

         Unidentified Miscellaneous Financial Claims            F.231     56      L.231     101

Sector Discrepancies                                            F.11      57

Instrument Discrepancies                                        F.12      57

                                                                    Balance        Reconciliation
                                                                     Sheet
Title                                                            Table     Page    Table     Page



Balance Sheet and Reconciliation Tables

Households and Nonprofit Organizations                           B.100    102      R.100     105

Nonfinancial Corporate Business                                  B.102    103      R.102     106

Nonfarm Noncorporate Business                                    B.103    104      R.103     107




                                                                     Flows             Levels
Title                                                            Table     Page    Table     Page



Supplementary Tables

Nonprofit Organizations                                          F.100.a  108      L.100.a   109

Consolidated Statement for Federal, State, and Local Governments F.106.c  110      L.106.c   111

Private Pension Funds: Defined Benefit Plans                     F.118.b  112      L.118.b   113

Private Pension Funds: Defined Contribution Plans                F.118.c  112      L.118.c   113

Individual Retirement Accounts (IRAs)                            F.225.i  112      L.225.i   113

Flow of Funds Matrix for 2007                                             114                115

Balance Sheet of Households and Nonprofit Organizations
 with Equity Detail                                                                B.100.e   116

                                                                                                                                  1




                         Flow of Funds Accounts, First Quarter 2008

          This publication presents the flow of funds         Specifically, outstanding in the flow of funds accounts
accounts for 2008:Q1.                                         are related to the flows in the following way:


Data revisions and other changes. The statistics in           Outstanding = Outstanding
                                                                           t                    t-1     + Flow + Discontinuity
                                                                                                                   t                 t
                                                                              B
                                                                                B
                                                                                                  B
                                                                                                         B
                                                                                                                  B
                                                                                                                    B
                                                                                                                                      B
                                                                                                                                        B




the attached tables reflect the use of new or revised         where "t" is the time period.

source data. Most significant revisions appear in recent
                                                                        Discontinuities        result         from      changes     in
quarters; however, new source information resulted in
                                                              valuation, breaks in source data, and changes in
changes to data for earlier periods.
                                                              definitions.       For most     series,        the      value     of the
                                                              discontinuity is zero for nearly all time periods.
1.        Assets of the nonfarm nonfinancial corporate
                                                              However, in a few instances, the discontinuity is
business sector (tables F.102 and L.102) were revised
                                                              nonzero for almost all time periods, or is quite large in a
from 2006:Q1 onward to reflect advance data from the
                                                              particular quarter, such as a period when there is a
Internal Revenue Service (IRS) Statistics of Income
                                                              sharp increase or decrease in equity prices or a major
(SOI) for 2006.
                                                              break in source data.

2.        The securities brokers and dealers sector
                                                                        The discontinuities in a series can distort
(tables F.129, F.215, L.129, and L.215) was modified
                                                              estimated rates of growth in assets and liabilities
to include bank loans as an additional liability category,
                                                              between    periods.           In order         to      minimize    these
reflecting the recent creation of the Primary Dealer
                                                              distortions, percentage changes in assets and liabilities
Credit Facility.
                                                              in flow of funds releases should be calculated as:

Explanatory notes for tables D.1, D.2, and D.3.
Domestic debt comprises credit market funds borrowed          Percentage change = (Flow / Outstanding
                                                                                      t                 t                  t-1
                                                                                                                             ) * 100
                                                                                        B
                                                                                          B
                                                                                                       B
                                                                                                          B
                                                                                                                          B
                                                                                                                               B




by U.S. entities from both domestic and foreign
                                                              Preliminary Estimates.
sources,   while  foreign     debt  represents   amounts                                       Figures shown for the most

borrowed by foreign financial and nonfinancial entities       recent quarter in these tables are based on preliminary

in U.S. markets only.      Financial sectors consist of       and incomplete information.                   A summary list of the

government-sponsored enterprises, agency- and GSE-            principal sources of information available when the

backed    mortgage     pools,    and   private   financial    latest quarter's data were compiled is provided in a table

institutions.  Credit market debt consists of debt            following this introduction. The distinction between

securities, mortgages, bank loans, commercial paper,          "available" data and "missing" data is not between final

consumer credit, U.S. government loans, and other             and preliminary versions of data, but rather between

loans and advances; it excludes trade debt, loans for the     those source estimates that are fully ready when the

purpose of carrying securities, and funds raised from         latest quarterly publication is compiled and those that

equity sources.                                               are not yet completed.          However, the items that are
                                                              shown as available are, in general, also preliminary in

          Growth rates in table D.1 are calculated by         the sense that they are subject to revision by source

dividing seasonally adjusted flows from table D.2 by          agencies.

seasonally adjusted levels at the end of the previous
period from table D.3. Seasonally adjusted levels in          Margins of Uncertainty. Flow of funds statistics are

flow of funds statistics are derived by carrying forward      subject to uncertainties resulting from measurement

year-end levels by seasonally adjusted flows. Growth          errors in source data, incompatibilities among data from

rates calculated from changes in unadjusted levels            different sources, potential revisions in both financial

printed in table L.2 can differ from those in table D.1.      and nonfinancial series, and incomplete data in parts of
                                                              the accounts. The size of these uncertainties cannot be
                                                              quantified in precise statistical terms, but allowance for
Relation of Flows to Outstandings.          Estimates of
financial assets and liabilities outstanding are linked to    them is explicitly made throughout the accounts by the

data on flows.     However, figures on outstandings           inclusion of "discrepancies" for various sectors and

contain discontinuities or breaks in series that could        instrument types.          A discrepancy for a sector is the

affect analysis of particular relationships over time.        difference between its measured sources of funds and

2

its measured uses of funds. For an instrument category,                A Guide to the Flow of Funds Accounts
a discrepancy is the difference between measured funds        is available. The 1,200-page Guide, published in two
borrowed    through    the  financial    instrument   and     volumes in January 2000, explains in detail how the
measured funds lent through that instrument. The size         U.S. financial accounts are prepared and the principles
of such discrepancies relative to the main asset or           underlying the accounts. The Guide can be purchased
liability components is one indication of the quality of      for $20.00 from the Board's Publications Services.
source data,  especially   on   an   annual   basis.  For     Publications Services accepts orders accompanied by
quarterly data, differences in seasonal adjustment            checks as well as credit card orders.
procedures for financial and nonfinancial components
of the accounts sometimes result in discrepancies that                 The Internet site for this release at the location
cancel in annual data.                                        shown above contains a link to an order form for the
                                                              Guide that can be mailed or faxed to Publications
Availability of Data.    Flow of     funds statistics are     Services. In addition, the Internet site includes a link to
updated about ten weeks following the end of a quarter.       the Guide's descriptions of the tables in the flow of
This publication -- the Z.1 release -- is available from      funds accounts.
the Board's Publications Services. Flow of funds data
are also available electronically through the Internet at     Subscription Information.         The Federal Reserve
the following location:                                       Board charges for subscriptions to all statistical
                                                              releases. Inquiries for releases should be directed to:
http://www.federalreserve.gov/releases/Z1
                                                                         Publications Services, Stop 127
          The Internet site also provides quarterly data                       Board of Governors
beginning in 1952, organized in compressed files that                     of the Federal Reserve System
correspond to the tables published in this release.                20th Street and Constitution Avenue, N.W.
There are files for quarterly data for seasonally adjusted                   Washington, DC 20551
flows, unadjusted flows, outstandings, balance sheets,                           (202) 452-3244
and debt (tables D.1, D.2, and D.3).


                                                                                                                 3



                          Availability of Data for Latest Quarter



                                   Available at time of publication            Major items missing
                                                                       U
                                                                                U
                                                                                                      U
                                   U




1. National income and              Preliminary estimates, seasonally          Unadjusted flows since 2006.
   product accounts (NIPA)          adjusted, for 2008:Q1.

2. Households and nonprofit         Estimates for this sector are largely residuals and are derived from data for
   organizations sector             other sectors. Availability of data depends on schedules for other sectors.
   (tables F.100 and L.100)         Data for consumer credit, which are estimated directly, are available
                                    through 2008:Q1. The source for nonprofit organizations data (tables
                                    F.100.a and L.100.a) is the Internal Revenue Service Statistics of Income.
                                    Data for nonprofit organizations are available for 1987 through 2000.

3. Nonfarm nonfinancial             Quarterly Financial Report (QFR) of           Statistics of Income data since
   corporate business               the Census Bureau through 2007:Q4;            2006.
   (tables F.102 and L.102)         Internal Revenue Service Statistics of
                                    Income (IRS/SOI) advanced data
                                    through 2006; securities offerings,
                                    mortgages, bank loans, commercial
                                    paper, and other loans through
                                    2008:Q1.

4. Nonfarm noncorporate             IRS/SOI data through 2005; bank and           Statistics of Income data since
   business                         finance company loans and mortgage            2005.
   (tables F.103 and L.103)         borrowing through 2008:Q1.

5. Farm business                    Mortgages, bank loans, loans from             Consumption of fixed capital
   (tables F.104 and L.104)         government-sponsored enterprises,             and undistributed profits since
                                    U.S. government loans to farms, and           2006.
                                    equity in government-sponsored
                                    enterprises through 2008:Q1;
                                    preliminary data for checkable deposits
                                    and currency and trade payables
                                    through 2007.

6. State and local governments      Gross offerings and retirements of            Selected financial asset items
  (tables F.105 and L.105)          municipal securities, deposits at banks,      since 2004:Q2.
                                    and nonmarketable U.S. government
                                    security issues through 2008:Q1; total
                                    financial assets through 2005:Q2 from
                                    the Census Bureau; breakdown of
                                    financial assets through 2004:Q2 from
                                    the comprehensive annual financial
                                    reports of state and local governments.


7. Federal government               Data from the Monthly Treasury                None.
  (tables F.106 and L.106)          Statement of Receipts and Outlays and
                                    Treasury data for loan programs
                                    through 2008:Q1.

4


 8. Rest of the world                 Balance of payments data through         Balance of payments data for
    (U.S. international               2007:Q4. NIPA estimates; data from       2008:Q1.
     transactions)                    bank Reports of Condition and from
    (tables F.107 and L.107)          Treasury International Capital System
                                      through 2008:Q1.


 9.  Monetary authority               All data through 2008:Q1.                None.
     (tables F.108 and L.108)


 10. Commercial banking               All data through 2008:Q1 for             Data since 2007 for branches of
     (tables F.109 through F.113      U.S.-chartered commercial banks,         domestic commercial banks
     and tables L.109 through         foreign banking offices in the U.S.,     located in U.S.-affiliated areas.
     L.113)                           bank holding companies, and
                                      commercial banks in U.S.-affiliated
                                      areas.

 11. Savings institutions             All data through 2008:Q1.                None.
    (tables F.114 and L.114)

 12. Credit unions                    All data through 2008:Q1.                None.
    (tables F.115 and L.115)

 13. Property-casualty insurance      All data through 2007:Q4.                Data for 2008:Q1.
     companies
    (tables F.116 and L.116)

 14. Life insurance companies         All data through 2007:Q4.                Data for 2008:Q1.
    (tables F.117 and L.117)

 15. Private pension funds            Quarterly data through 2008:Q1;          Form 5500 data since 2005.
    (tables F.118 and L.118)          Internal Revenue Service/Department
                                      of Labor/Pension Benefit Guaranty
                                      Corporation Form 5500 data through
                                      2005.

 16. State and local government       Detailed data through 2006:Q2 from       Detailed data since 2006:Q2 and
    employee retirement funds         the Census Bureau; sample data           sample data for 2008:Q1.
    (tables F.119 and L.119)          through 2007:Q4 from the Census
                                      Bureau.

 17. Federal government retirement    Data from the Monthly Treasury           None.
    funds                             Statement, the Thrift Savings Plan, and
    (tables F.120 and L.120)          the National Railroad Retirement
                                      Investment Trust through 2008:Q1.

 18. Money market mutual              All data through 2008:Q1.                None.
    funds
    (tables F.121 and L.121)

 19. Mutual funds                     All data through 2008:Q1.                None.
    (tables F.122 and L.122)


 20. Closed-end funds                 All data through 2007:Q4.                Data for 2008q1.
    (tables F.123 and L.123)

 21. Exchange-traded funds            All data through 2008:Q1.                None.
    (tables F.123 and L.123)

                                                                                                              5



22. Government-sponsored        Data for Fannie Mae, Freddie Mac,           None.
    enterprises                 FHLBs, Farmer Mac, FCS, FICO and
    (tables F.124 and L.124)    REFCORP through 2008:Q1.

23. Agency- and GSE-backed      All data through 2008:Q1.                   None.
   mortgage pools
   (tables F.125 and L.125)

24. Issuers of asset-backed     All data for private mortgage pools,        None.
   securities (ABSs)            consumer credit, business loans,
   (tables F.126 and L.126)     student loans, consumer leases, and
                                trade credit securitization through
                                2008:Q1.

25. Finance companies           All data through 2008:Q1.                   None.
   (tables F.127 and L.127)

26. Real estate investment      Data from SNL REIT DataSource               None.
   trusts (REITs)               through 2008:Q1.
   (tables F.128 and L.128)

                                                                            None.
27. Security brokers and        Data for firms filing FOCUS and
   dealers                      FOGS reports through 2008:Q1.
   (tables F.129 and L.129)

28. Funding corporations        Estimates for this sector are largely residuals and are derived from data for
   (tables F.130 and L.130)     other sectors.

