                                                                     For use at 12:00 p.m., eastern time
                                                                                              Thursday
                                                                                     December 6, 2007




FEDERAL RESERVE statistical release


Z.1




Flow of Funds Accounts
of the United States

Flows and Outstandings
Third Quarter 2007




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




                                                  Third Quarter 2007

         Debt of the domestic nonfinancial sectors is         in the third quarter was driven primarily by increases in
estimated to have expanded at a seasonally adjusted           borrowing from banks and other intermediaries.
annual rate of 9 percent in the third quarter of 2007,
1-3/4 percentage points faster than in the previous                     State and local government debt increased at
quarter. The acceleration in the third quarter was in the     an annual rate of 8-1/2 percent last quarter, a slightly
federal government and business sectors, with the             weaker pace than in the first half of the year. Federal
household and state and local government sectors              government debt expanded at an annual rate of
showing modest decreases in the rate of debt growth.          8-3/4 percent in the third quarter of 2007 after having
                                                              contracted at a 1-1/2 percent rate in the previous
         Household debt expanded at an annual rate of         quarter.
7 percent in the third quarter of 2007, slightly below the
pace in the first half of the year. In the third quarter,               At the end of the third quarter of 2007, the
home mortgage debt increased at an annual rate of             level of domestic nonfinancial debt outstanding was
6-3/4 percent--the slowest quarterly growth rate since        $30.6 trillion; household debt was $13.6 trillion,
mid-1998. In contrast, consumer credit increased at an        nonfinancial business debt was $9.8 trillion, and total
annual rate of 6 percent in the third quarter, a somewhat     government debt was $7.2 trillion.
faster pace than in recent quarters.
                                                                        Household net worth--the difference between
         Nonfinancial business debt rose at an annual         the value of assets and liabilities--was at an estimated
rate of 12 percent in the third quarter of 2007,              level of $58.6 trillion at the end of the third quarter of
1-1/4 percentage points faster than in the previous           2007, $0.6 trillion dollars more than in the preceding
quarter. The acceleration in nonfinancial business debt       quarter.


Growth of Domestic Nonfinancial Debt1
                                             P
                                                 P




Percentage changes; quarterly data are seasonally adjusted annual rates
                                                                                 State and
                            Total             Households      Business                                   Federal
                                                                                local govts.
 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                   8.3        10.6                 3.4                    -1.9
 2000                         4.9                   9.1         9.1                 1.3                    -8.0
 2001                         6.4                   9.6         5.9                 8.8                    -0.2

 2002                         7.3                  10.9         2.4                11.0                     7.6
 2003                         8.1                  11.5         2.6                 8.3                   10.9
 2004                         8.9                  11.3         5.8                 7.4                     9.0
 2005                         9.1                  10.7         7.8                10.2                     7.0
 2006                         8.8                  10.3         9.6                 8.2                     3.9

 2006:Q1                    10.0                   11.3        10.2                 5.5                     8.0
       Q2                     8.3                  11.2         8.6                 7.3                     1.0
       Q3                     7.2                   8.7         6.9                 7.7                     3.6
       Q4                     8.6                   8.4        11.4                11.2                     2.8


 2007:Q1                      8.0                   7.1         9.3                11.2                     6.7
       Q2                     7.2                   7.6        10.7                10.3                    -1.4
       Q3                     8.9                   6.9        11.9                 8.4                     8.8
1. Changes shown are on an end-of-period basis.

                                              Table of Contents



Title                                                                            Table     Page



Flow of Funds Accounts, Third 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, Third Quarter 2007

          This publication presents the flow of funds        printed in table L.2 can differ from those in table D.1.
accounts for 2007:Q3.
                                                             Relation of Flows to Outstandings.                        Estimates of
Data revisions and other changes. The statistics in          financial assets and liabilities outstanding are linked to
the attached tables reflect the use of new or revised        data on flows.         However, figures on outstandings
source data. Most significant revisions appear in recent     contain discontinuities or breaks in series that could
quarters; however, new source information resulted in        affect analysis of particular relationships over time.
changes to data for earlier periods.                         Specifically, outstanding in the flow of funds accounts
                                                             are related to the flows in the following way:
1.        Assets of the state and local government
sector, excluding employee retirement funds, (tables         Outstanding  t     = Outstanding   t-1    + Flow + Discontinuity
                                                                                                                   t                 t
                                                                             B
                                                                               B
                                                                                                 B
                                                                                                        B
                                                                                                                  B
                                                                                                                    B
                                                                                                                                      B
                                                                                                                                        B




F.105 and L.105) have been revised from 2004:Q3              where "t" is the time period.

forward to reflect improved methodologies and new
                                                                       Discontinuities         result         from      changes     in
benchmark data from the Census Bureau.
                                                             valuation, breaks in source data, and changes in
                                                             definitions.       For  most      series,       the      value     of the
2.        U.S. checkable and time deposits of the rest of
                                                             discontinuity is zero for nearly all time periods.
the world sector (tables F.107, F.204, F.205, L.107,
                                                             However, in a few instances, the discontinuity is
L.204, and L.205) have been revised from 2003:Q1
                                                             nonzero for almost all time periods, or is quite large in a
forward to reflect a reevaluation of the methodology in
                                                             particular quarter, such as a period when there is a
using the Treasury International Capital flow data.
                                                             sharp increase or decrease in equity prices or a major
                                                             break in source data.
3.        Assets of the state and local government
employee retirement funds sector (tables F.119 and
                                                                       The discontinuities in a series can distort
L.119) have been revised from 2002:Q3 forward to
                                                             estimated rates of growth in assets and liabilities
reflect improved methodologies and new benchmark
                                                             between    periods.           In  order         to      minimize    these
data from the Census Bureau.
                                                             distortions, percentage changes in assets and liabilities
                                                             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
by U.S. entities from both domestic and foreign              Percentage change       t    = (Flow / Outstanding
                                                                                                       t                   t-1
                                                                                                                             ) * 100
                                                                                       B
                                                                                         B
                                                                                                      B
                                                                                                         B
                                                                                                                          B
                                                                                                                               B




sources,   while  foreign    debt  represents  amounts
borrowed by foreign financial and nonfinancial entities      Preliminary Estimates.            Figures shown for the most

in U.S. markets only.     Financial sectors   consist of     recent quarter in these tables are based on preliminary

government-sponsored enterprises, agency- and GSE-           and   incomplete      information.             A summary list of the

backed    mortgage     pools,   and   private  financial     principal sources of information available when the

institutions.  Credit market debt consists of debt           latest quarter's data were compiled is provided in a table

securities, mortgages, bank loans, commercial paper,         following this introduction.                 The distinction between

consumer credit, U.S. government loans, and other            "available" data and "missing" data is not between final

loans and advances; it excludes trade debt, loans for the    and preliminary versions of data, but rather between

purpose of carrying securities, and funds raised from        those source estimates that are fully ready when the

equity sources.                                              latest quarterly publication is compiled and those that
                                                             are not yet completed.           However, the items that are

          Growth rates in table D.1 are calculated by        shown as available are, in general, also preliminary in

dividing seasonally adjusted flows from table D.2 by         the sense that they are subject to revision by source

seasonally adjusted levels at the end of the previous        agencies.

period from table D.3. Seasonally adjusted levels in
flow of funds statistics are derived by carrying forward     Margins of Uncertainty. Flow of funds statistics are

year-end levels by seasonally adjusted flows. Growth         subject to uncertainties resulting from measurement

rates calculated from changes in unadjusted levels           errors in source data, incompatibilities among data from

2


different sources, potential revisions in both financial        There are files for quarterly data for seasonally adjusted
and nonfinancial series, and incomplete data in parts of        flows, unadjusted flows, outstandings, balance sheets,
the accounts. The size of these uncertainties cannot be         and debt (tables D.1, D.2, and D.3).
quantified in precise statistical terms, but allowance for
them is explicitly made throughout the accounts by the                   A Guide to the Flow of Funds Accounts
inclusion of "discrepancies" for various sectors and            is available. The 1,200-page Guide, published in two
instrument types.   A discrepancy for a sector is the           volumes in January 2000, explains in detail how the
difference between its measured sources of funds and            U.S. financial accounts are prepared and the principles
its measured uses of funds. For an instrument category,         underlying the accounts. The Guide can be purchased
a discrepancy is the difference between measured funds          for $20.00 from the Board's Publications Services.
borrowed    through    the   financial   instrument     and     Publications Services accepts orders accompanied by
measured funds lent through that instrument. The size           checks as well as credit card orders.
of such discrepancies relative to the main asset or
liability components is one indication of the quality of                 The Internet site for this release at the location
source data,  especially    on   an  annual    basis.  For      shown above contains a link to an order form for the
quarterly data, differences in seasonal adjustment              Guide that can be mailed or faxed to Publications
procedures for financial and nonfinancial components            Services. In addition, the Internet site includes a link to
of the accounts sometimes result in discrepancies that          the Guide's descriptions of the tables in the flow of
cancel in annual data.                                          funds accounts.

Availability of Data.    Flow     of funds    statistics are    Subscription Information.         The Federal Reserve
updated about ten weeks following the end of a quarter.         Board   charges   for  subscriptions    to  all  statistical
This publication -- the Z.1 release -- is available from        releases. Inquiries for releases should be directed to:
the Board's Publications Services. Flow of funds data
are also available electronically through the Internet at                  Publications Services, Stop 127
the following location:                                                           Board of Governors
                                                                            of the Federal Reserve System
http://www.federalreserve.gov/releases/Z1                            20th Street and Constitution Avenue, N.W.
                                                                                Washington, DC 20551
          The Internet site also provides quarterly data                            (202) 452-3244
beginning in 1952, organized in compressed files that
correspond   to the tables published in this release.

                                                                                                                 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 2007:Q3.

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:Q3. 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:Q2;            2005.
   (tables F.102 and L.102)         Internal Revenue Service Statistics of
                                    Income (IRS/SOI) preliminary data
                                    through 2005; securities offerings,
                                    mortgages, bank loans, commercial
                                    paper, and other loans through
                                    2007:Q3.

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:Q3.

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 2007:Q3; 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:Q2.
                                    and nonmarketable U.S. government
                                    security issues through 2007:Q3; 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 2007:Q3.

4


 8. Rest of the world                 Balance of payments data through         Balance of payments data for
    (U.S. international               2007:Q2. NIPA estimates; data from       2007:q3.
     transactions)                    bank Reports of Condition and from
    (tables F.107 and L.107)          Treasury International Capital System
                                      through 2007:Q3.


 9.  Monetary authority               All data through 2007:Q3.                None.
     (tables F.108 and L.108)


 10. Commercial banking               All data through 2007:Q3 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:Q3.                None.
    (tables F.114 and L.114)

 12. Credit unions                    All data through 2007:Q3.                None.
    (tables F.115 and L.115)

 13. Property-casualty insurance      Preliminary data for 2007:Q2.            Data for 2007:Q3.
     companies
    (tables F.116 and L.116)

 14. Life insurance companies         Preliminary data for 2007:Q2.            Data for 2007:Q3.
    (tables F.117 and L.117)

 15. Private pension funds            Quarterly data through 2007:Q3;          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       Detailed data trough 2006:Q2 from the    Detailed data since 2006:Q2 and
    employee retirement funds         Census Bureau; sample data through       sample data since 2007:Q2.
    (tables F.119 and L.119)          2007:Q2 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 2007:Q3.

 18. Money market mutual              All data through 2007:Q3.                None.
    funds
    (tables F.121 and L.121)

 19. Mutual funds                     All data through 2007:Q3.                None.
    (tables F.122 and L.122)


 20. Closed-end funds                 All data through 2007:Q2.                Data since 2007:Q2
    (tables F.123 and L.123)

 21. Exchange-traded funds            All data through 2007:Q3.                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 2007:Q3.

 23. Agency- and GSE-backed      All data through 2007:Q3.                   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:Q3.

 25. Finance companies           All data through 2007:Q3.                   None.
    (tables F.127 and L.127)

 26. Real estate investment      Data from SNL REIT DataSource               None.
    trusts (REITs)               through 2007:Q3.
    (tables F.128 and L.128)

                                                                             None.
 27. Security brokers and        Data for firms filing FOCUS and
    dealers                      FOGS reports through 2007:Q3.
    (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.

