                                                                     For use at 12:00 p.m., eastern time
                                                                                              Thursday
                                                                                           June 7, 2007




FEDERAL RESERVE statistical release


Z.1




Flow of Funds Accounts
of the United States

Flows and Outstandings
First Quarter 2007




Board of Governors of the Federal Reserve System, Washington DC 20551

                                  Flow of Funds Summary Statistics
                                                First Quarter 2007

          Debt of the domestic nonfinancial sectors            were below the pace in the preceding quarter.
expanded at a seasonally adjusted annual rate of 7-1/4
percent in the first quarter of 2007, a percentage point                 State and local government debt increased at
less than in the previous quarter. The deceleration in         an annual rate of 8-1/2 percent last quarter, in line with
the first quarter was widespread across sectors.               the pace for 2006. Federal government debt rose at a
                                                               pace of 6-1/2 percent in first quarter of 2007.
          Household debt expanded at an annual rate of
6 percent in the first quarter of 2007, about 1-1/4                      At the end of the first quarter of 2007, the
percentage points less than the pace in the fourth             level of domestic nonfinancial debt outstanding was
quarter of 2006. In the first quarter, growth of home          $29.3 trillion. Household debt amounted to $13.0
mortgage debt slowed to a rate of 6-1/4 percent--the           trillion, and nonfinancial business debt was $9.2
slowest quarterly pace since 1998. Meanwhile, in the           trillion. Combined, state and local governments and the
first quarter, consumer credit grew at a rate of 4-3/4         federal government had outstanding debt of $7.0
percent, within its recent range.                              trillion.

          Nonfinancial business debt rose at an annual                   Household net worth--the difference between
rate of 9 percent in the first quarter of 2007, not quite as   the    value   of     assets   and     liabilities--totaled
fast as in the previous quarter. In the first quarter, net     $56.2 trillion at the end of the first quarter of 2007, up
issuance of open market paper and corporate bonds              $0.6 trillion dollars from the preceding quarter.


Growth of Domestic Nonfinancial Debt1
Percentage changes; quarterly data are seasonally adjusted annual rates

                              Total           Households      Business             State and
                                                                                  local govts.             Federal

 1997                          5.3                  5.8          9.0                  4.3                     0.6
 1998                          6.8                  7.8         12.3                  6.3                    -1.4
 1999                          6.4                  8.4         10.6                  3.4                    -1.9
 2000                          4.9                  9.0          9.2                  1.3                    -8.0
 2001                          6.3                  9.3          5.9                  8.8                    -0.2

 2002                          7.2                10.6           2.5                 11.0                     7.6
 2003                          8.2                11.6           2.6                  8.3                   10.9
 2004                          9.0                11.6           5.8                  7.4                     9.0
 2005                          9.4                11.5           7.6                 10.2                     7.0
 2006                          8.1                  8.7          9.6                  8.2                     3.9

 2006:Q1                       8.9                  9.3         10.0                  3.3                     8.0
        Q2                     7.5                  9.2          8.8                  6.7                     1.0
        Q3                     6.9                  7.9          7.0                  8.2                     3.6
        Q4                     8.2                  7.2         11.4                 13.6                     2.8

 2007:Q1                       7.3                  6.0          9.0                  8.6                     6.6
1. Changes shown are on an end-of-period basis.

                                              Table of Contents


Title                                                                           Table     Page


Flow of Funds Accounts, First Quarter 2007                                                 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 2006                                             114                115

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




                        Flow of Funds Accounts, First Quarter 2007

         This publication presents the flow of funds       Explanatory notes for tables D.1, D.2, and D.3.
accounts for 2007:Q1.                                      Domestic debt comprises credit market funds borrowed
                                                           by U.S. entities from both domestic and foreign
Data revisions and other changes. The statistics in        sources, while foreign debt represents amounts
the attached tables reflect the use of new or revised      borrowed by foreign financial and nonfinancial entities
source data. Most significant revisions appear in recent   in U.S. markets only. Financial sectors consist of
quarters; however, new source information resulted in      government-sponsored enterprises, agency- and GSE-
changes to data for earlier periods.                       backed mortgage pools, and private financial
                                                           institutions.   Credit market debt consists of debt
1.       Seasonal factors for quarterly flows of federal   securities, mortgages, bank loans, commercial paper,
government borrowing have been recalculated for the        consumer credit, U.S. government loans, and other
period 1996:Q1 onward. The factors were generated          loans and advances; it excludes trade debt, loans for the
using the X-12-ARIMA/88 seasonal adjustment                purpose of carrying securities, and funds raised from
program from Statistics Canada.                            equity sources.

2.       Assets of the nonfarm nonfinancial corporate                Growth rates in table D.1 are calculated by
business sector (tables F.102 and L.102) were revised      dividing seasonally adjusted flows from table D.2 by
from 2005:Q1 onward to reflect advance data from the       seasonally adjusted levels at the end of the previous
Internal Revenue Service (IRS) Statistics of Income        period from table D.3. Seasonally adjusted levels in
(SOI) for 2005.                                            flow of funds statistics are derived by carrying forward
                                                           year-end levels by seasonally adjusted flows. Growth
3.       Farm sector (tables F.104, F.221, and L.104,      rates calculated from changes in unadjusted levels
L.221) estimates have been revised from 1985:Q1            printed in table L.2 can differ from those in table D.1.
onward to reflect farm business balance sheet data from
the U.S. Department of Agriculture. Mortgages on           Relation of Flows to Outstandings. Estimates of
farm houses have been reclassified from farm               financial assets and liabilities outstanding are linked to
mortgages to home mortgages for the same period.           data on flows.      However, figures on outstandings
                                                           contain discontinuities or breaks in series that could
4.       Mortgage holdings of commercial banks and         affect analysis of particular relationships over time
savings institutions (tables F.217, F.218, F.219, F.220    specifically, outstanding in the flow of funds accounts
and L.217, L.218, L.219, L.220) have been revised          are related to the flows in the following way:
from 2003:Q2 onward as a result of improved
information on the type of construction loans held by      Outstanding = Outstanding + Flow + Discontinuity
                                                                        t                t-1      t                t
these depositories.                                        where "t" is the time period.


5.       A new memorandum item has been added to                     Discontinuities result from changes in
the U.S.-chartered commercial bank sector (tables          valuation, breaks in source data, and changes in
F.110 and L.110) to reflect the availability of new Call   definitions. For most series, the value of the
Report information which allows for some leases to be      discontinuity is zero for nearly all time periods.
classified as operating leases.                            However, in a few instances, the discontinuity is
                                                           nonzero for almost all time periods, or is quite large in a
6.       For the private pension fund sector (tables       particular quarter, such as a period when there is a
F.118, F.118.b, F.118.c and L.118, L.118.b, L.118.c),      sharp increase or decrease in equity prices or a major
estimates have been revised from 2001:Q1 onward to         break in source data.
reflect methodological improvements and new data
from the U.S. Internal Revenue Service/Department of
Labor/Pension Benefit Guaranty Corporation Form
5500 filed for plan year 2004.

2

          The discontinuities in a series can distort        Availability of Data. Flow of funds statistics are
estimated rates of growth in assets and liabilities          updated about ten weeks following the            end of a
between periods.        In order to minimize these           quarter. This publication -- the Z.1 release -- is
distortions, percentage changes in assets and liabilities    available from the Board's Publications Services. Flow
in flow of funds releases should be calculated as:           of funds data are also available electronically through
                                                             the Internet at the following location:
Percentage change = (Flow / Outstanding ) * 100
                      t        t                t-1
                                                             http://www.federalreserve.gov/releases/Z1
Preliminary Estimates. Figures shown for the most
recent quarter in these tables are based on preliminary               The Internet site also provides quarterly data
and incomplete information. A summary list of the            beginning in 1952, organized in compressed files that
principal sources of information available when the          correspond to the tables published in this release.
latest quarter's data were compiled is provided in a table   There are files for quarterly data for seasonally adjusted
following this introduction. The distinction between         flows, unadjusted flows, outstandings, balance sheets,
"available" data and "missing" data is not between final     and debt (tables D.1, D.2, and D.3).
and preliminary versions of data, but rather between
those source estimates that are fully ready when the                  A Guide to the Flow of Funds Accounts           is
latest quarterly publication is compiled and those that      available. The 1,200-page Guide, published in two
are not yet completed. However, the items that are           volumes in January 2000, explains in detail how the
shown as available are, in general, also preliminary in      U.S. financial accounts are prepared and the principles
the sense that they are subject to revision by source        underlying the accounts. The Guide can be purchased
agencies.                                                    for $20.00 from the Board's Publications Services.
                                                             Publications Services accepts orders accompanied by
Margins of Uncertainty. Flow of funds statistics are         checks as well as credit card orders.
subject to uncertainties resulting from measurement
errors in source data, incompatibilities among data from              The Internet site for this release at the location
different sources, potential revisions in both financial     shown above contains a link to an order form for the
and nonfinancial series, and incomplete data in parts of     Guide that can be mailed or faxed to Publications
the accounts. The size of these uncertainties cannot be      Services. In addition, the Internet site includes a link to
quantified in precise statistical terms, but allowance for   the Guide's descriptions of the tables in the flow of
them is explicitly made throughout the accounts by the       funds accounts.
inclusion of "discrepancies" for various sectors and
instrument types. A discrepancy for a sector is the          Subscription Information.         The Federal Reserve
difference between its measured sources of funds and         Board charges for subscriptions to all statistical
its measured uses of funds. For an instrument category,      releases. Inquiries for releases should be directed to:
a discrepancy is the difference between measured funds
borrowed through the financial instrument and                            Publications Services, Stop 127
measured funds lent through that instrument. The size                          Board of Governors
of such discrepancies relative to the main asset or                      of the Federal Reserve System
liability components is one indication of the quality of           20th Street and Constitution Avenue, N.W.
source data, especially on an annual basis. For                              Washington, DC 20551
quarterly data, differences in seasonal adjustment                                (202) 452-3244
procedures for financial and nonfinancial components
of the accounts sometimes result in discrepancies that
cancel in annual data.

                                                                                                              3



                          Availability of Data for Latest Quarter



                                   Available at time of publication           Major items missing


1. National income and             Preliminary estimates, seasonally          Unadjusted flows since 2005.
   product accounts (NIPA)         adjusted, for 2007: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 2007: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 2006:Q4;          2005.
   (tables F.102 and L.102)        Internal Revenue Service Statistics of
                                   Income (IRS/SOI) advanced data
                                   through 2005; securities offerings,
                                   mortgages, bank loans, commercial
                                   paper, and other loans through
                                   2007:Q1.

4. Nonfarm noncorporate            IRS/SOI data through 2004; bank and         Statistics of Income data since
   business                        finance company loans and mortgage          2004.
   (tables F.103 and L.103)        borrowing through 2007: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         2003.
                                   equity in government-sponsored
                                   enterprises through 2007:Q1;
                                   preliminary data for checkable deposits
                                   and currency and trade payables
                                   through 2006.

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:Q3.
                                   and nonmarketable U.S. government
                                   security issues through 2007:Q1;
                                   selected financial assets through
                                   2004:Q3 from Census data and 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
                                   through 2007:Q1; Treasury data for
                                   loan programs through 2007:Q1.

4


 8. Rest of the world               Balance of payments data through        Balance of payments data for
     (U.S. international            2006:Q4; NIPA estimates; data from      2007:Q1.
     transactions)                  bank Reports of Condition and from
     (tables F.107 and L.107)       Treasury International Capital System
                                    through 2007:Q1.


 9. Monetary authority              All data through 2007:Q1.               None.
     (tables F.108 and L.108)


 10. Commercial banking             All data through 2007:Q1 for            Data since 2006 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 2007:Q1.               None.
     (tables F.114 and L.114)

 12. Credit unions                  All data through 2007:Q1.               None.
     (tables F.115 and L.115)

 13. Property-casualty insurance    All data through 2006:Q4.               Data for 2007:Q1.
     companies
     (tables F.116 and L.116)

 14. Life insurance companies       All data through 2006:Q4.               Data for 2007:Q1.
     (tables F.117 and L.117)

 15. Private pension funds          Quarterly data through 2007:Q1;         Form 5500 data since 2004.
     (tables F.118 and L.118)       Internal Revenue Service/Department
                                    of Labor/Pension Benefit Guaranty
                                    Corporation Form 5500 data through
                                    2004.

 16. State and local government     Selected financial assets through       Data for 2007:Q1.
     employee retirement funds      2006:Q4 from Census data and the
     (tables F.119 and L.119)       comprehensive annual financial reports
                                    of state and local pension funds.

 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 2007:Q1.

 18. Money market mutual            All data through 2007:Q1.               None.
     funds
     (tables F.121 and L.121)


 19. Mutual funds                   All data through 2007:Q1.               None.
     (tables F.122 and L.122)



 20. Closed-end funds               All data through 2007:Q1.               None.
     (tables F.123 and L.123)

                                                                                                           5



21. Exchange-traded funds       All data through 2007:Q1.                   None.
    (tables F.123 and L.123)

22. Government-sponsored        Data for FHLBs, Farmer Mac, FCS,            Much of the source data for
    enterprises                 FICO and REFCORP through                    Fannie Mae beginning in
    (tables F.124 and L.124)    2007:Q1. Complete data for Fannie           2004:Q4 and for Freddie Mac
                                Mae through 2004:Q3 and for Freddie         beginning in 2005:Q4.
                                Mac through 2005:Q3.

23. Agency- and GSE-backed      All data through 2007: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
                                2007:Q1.

25. Finance companies           All data through 2007:Q1.                   None.
    (tables F.127 and L.127)

26. Real estate investment      Data from SNL REIT DataSource               None.
    trusts (REITs)              through 2007:Q1.
    (tables F.128 and L.128)

27. Security brokers and        Data for firms filing FOGS reports          Data for firms filing FOCUS
    dealers                     through 2007:Q1.                            reports for 2007: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.

