Federal Reserve Statistical Release, Z.1, Flow of Funds Accounts of the United States; title with eagle logo links to Statistical Release home page

Release Date: September 16, 2004
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Flow of Funds Summary Statistics
Second Quarter 2004

Domestic nonfinancial debt rose at a seasonally adjusted annual rate of 7-3/4 percent in the second quarter of 2004, somewhat slower than the 9 percent pace in the first quarter. The slowdown in debt growth last quarter was distributed broadly across all of the major nonfinancial sectors in the United States.

On a seasonally adjusted basis, growth of federal government debt slowed to 10-3/4 percent at an annual rate in the second quarter from a 12 percent rate in the previous quarter. In the state and local government sector, debt expanded 4-1/2 percent at an annual rate last quarter, about half the first-quarter pace. Although growth of household debt slowed from the rapid pace of the previous quarter, it remained strong at an annual rate of 9-1/2 percent in the second quarter.

Mortgage debt expanded at a double-digit annual rate last quarter and consumer credit rose moderately. Debt of nonfinancial businesses grew at an annual rate of 4-1/2 percent in the second quarter, a bit slower than in the first quarter. Among the components of nonfinancial business borrowing, net issuance of corporate bonds was negligible in the second quarter, but commercial mortgage borrowing was sizable and on a seasonally adjusted basis, bank loans posted the first quarterly net increase since late-2000.

The seasonally adjusted level of domestic nonfinancial debt outstanding was just under $23.3 trillion at the end of the second quarter of 2004. Debt of nonfederal sectors was $19 trillion and federal debt held by the public was about $4.3 trillion.

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






State and
local govts.
 1994 4.6 4.7 4.6 7.6 3.8 -4.0
 1995 5.3 4.1 5.7 7.1 7.2 -5.5
 1996 5.2 4.0 5.7 6.8 6.2 -1.5
 1997 5.3 0.6 7.0 6.0 9.0 4.0
 1998 6.9 -1.4 9.6 7.9 12.3 6.3
 1999 6.3 -1.9 8.8 8.1 10.6 3.4
 2000 4.9 -8.0 8.4 8.7 9.4 1.3
 2001 6.2 -0.2 7.7 9.0 6.1 8.9
 2002 6.9 7.6 6.7 9.6 2.8 11.1
 2003 8.1 10.9 7.5 10.2 4.3 8.2
 2003Q1 7.4 5.1 7.9 11.3 4.0 6.9
 2003Q2 11.0 19.6 9.1 11.6 5.7 11.3
 2003Q3 7.0 8.2 6.8 9.5 3.3 7.2
 2003Q4 6.3 9.1 5.7 7.0 3.8 6.3
 2004Q1 9.1 12.0 8.5 11.3 4.8 9.5
 2004Q2 7.7 10.7 7.0 9.5 4.4 4.6

  1.  Changes shown are on an end-of-period basis. Return to text

Flow of Funds Accounts, Second Quarter 2004

This publication presents the flow of funds accounts for 2004:Q2.

Data revisions and other changes. The statistics in the attached tables reflect the use of new or revised source data. Most significant revisions appear in recent quarters; however, new source information resulted in changes to data for earlier periods.

1. Seasonal factors for quarterly financial flows have been recalculated for the period 1994:Q1 onward. The factors were generated using the Statistics Canada X-12-ARIMA/88 seasonal adjustment program.

2. The statistics in this publication reflect the annual revisions to the national income and product accounts from 2001 forward released by the Department of Commerce on July 30, 2004, and subsequent information for 2004:Q2 released on August 27, 2004. The August 2004 issue of the Survey of Current Business details the major features of the annual revision of the national income and product accounts.

3. The state and local government sector (tables F.105 and L.105) was modified to include two additional asset categories, money market mutual funds and trade receivables. In addition, estimates for existing categories of assets were revised from 1998:Q3 forward. The new data are based on information from the Comprehensive Annual Financial Reports of states that hold a majority of the financial assets of all states and a sample of large cities.

4. Revisions to the rest of the world sector (tables F.107 and L.107) reflect new estimates of the balance of payments from the Department of Commerce for 1989 through 2003. The new estimates are detailed in the July 2004 issue of the Survey of Current Business.

5. The government-sponsored enterprises sector (tables F.125 and L.125) was modified to include an additional asset category, time and savings deposits. In addition, the sector has been revised from 1988:Q4 forward to include the Federal Agricultural Mortgage Corporation (Farmer Mac).

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 sources, while foreign debt represents amounts borrowed by foreign financial and nonfinancial entities in U.S. markets only. Financial sectors consist of government-sponsored enterprises, agency- and GSE- backed mortgage pools, and private financial institutions. Credit market debt consists of debt securities, mortgages, bank loans, commercial paper, consumer credit, U.S. government loans, and other loans and advances; it excludes trade debt, loans for the purpose of carrying securities, and funds raised from equity sources.

Growth rates in table D.1 are calculated by dividing seasonally adjusted flows from table D.2 by seasonally adjusted levels at the end of the previous period from table D.3. Seasonally adjusted levels in flow of funds statistics are derived by carrying forward year-end levels by seasonally adjusted flows. Growth rates calculated from changes in unadjusted levels printed in table L.2 can differ from those in table D.1.

Relation of Flows to Outstandings. Estimates of financial assets and liabilities outstanding are linked to data on flows. However, figures on outstandings contain discontinuities or breaks in series that could affect analysis of particular relationships over time specifically, outstanding in the flow of funds accounts are related to the flows in the following way:

Outstanding t = Outstanding t-1+ Flow t+ Discontinuity t
where "t" is the time period.

Discontinuities result from changes in valuation, breaks in source data, and changes in definitions. For most series, the value of the discontinuity is zero for nearly all time periods. However, in a few instances, the discontinuity is nonzero for almost all time periods, or is quite large in a particular quarter, such as a period when there is a sharp increase or decrease in equity prices or a major break in source data.

The discontinuities in a series can distort estimated rates of growth in assets and liabilities between periods. In order to minimize these distortions, percentage changes in assets and liabilities in flow of funds releases should be calculated as:

Percentage change t = (Flow t / Outstanding t-1) * 100

Preliminary Estimates. Figures shown for the most recent quarter in these tables are based on preliminary and incomplete information. A summary list of the principal sources of information available when the latest quarter's data were compiled is provided in a table following this introduction. The distinction between "available" data and "missing" data is not between final

and preliminary versions of data, but rather between those source estimates that are fully ready when the latest quarterly publication is compiled and those that are not yet completed. However, the items that are shown as available are, in general, also preliminary in the sense that they are subject to revision by source agencies.

Margins of Uncertainty. Flow of funds statistics are subject to uncertainties resulting from measurement errors in source data, incompatibilities among data from different sources, potential revisions in both financial 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 them is explicitly made throughout the accounts by the inclusion of "discrepancies" for various sectors and instrument types. A discrepancy for a sector is the difference between its measured sources of funds and its measured uses of funds. For an instrument category, a discrepancy is the difference between measured funds borrowed through the financial instrument and measured funds lent through that instrument. The size of such discrepancies relative to the main asset or liability components is one indication of the quality of source data, especially on an annual basis. Fo quarterly data, differences in seasonal adjustment procedures for financial and nonfinancial components of the accounts sometimes result in discrepancies that cancel in annual data.

Availability of Data. Flow of funds statistics are updated about ten weeks following the end of a quarter. This publication - the Z.1 release - is available from the Board's Publications Services. Flow of funds data are also available electronically through the Internet at the following location:


The Internet site also provides quarterly data beginning in 1952, organized in compressed files that correspond to the tables published in this release. There are files for quarterly data for seasonally adjusted flows, unadjusted flows, outstandings, balance sheets, and debt (tables D.1, D.2, and D.3).

A Guide to the Flow of Funds Accounts is available. The 1,200-page Guide, published in two volumes in January 2000, explains in detail how the U.S. financial accounts are prepared and the principles underlying the accounts. The Guide can be purchased for $20.00 from the Board's Publications Services. Publications Services accepts orders accompanied by checks as well as credit card orders.

The Internet site for this release at the location shown above contains a link to an order form for the Guide that can be mailed or faxed to Publications Services. In addition, the Internet site includes a link to the Guide's descriptions of the tables in the flow of funds accounts.

Subscription Information. The Federal Reserve Board charges for subscriptions to all statistical releases. Inquiries for releases should be directed to:

Publications Services, Stop 127
Board of Governors
of the Federal Reserve System
20th Street and Constitution Avenue, N.W.
Washington, DC 20551
(202) 452-3244

Availability of Data for Latest Quarter

Available at time of publication

Major items missing
1. National income and product accounts (NIPA) Preliminary estimates, seasonally adjusted, for 2004:Q2. Unadjusted flows since 2002.
2. Households and nonprofit organizations sector (tables F.100 and L.100) Estimates for this sector are largely residuals and are derived from data for other sectors. Availability of data depends on schedules for other sectors. Data for consumer credit, which are estimated directly, are available through 2004:Q2. 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 corporate business (tables F.102 and L.102) Quarterly Financial Report (QFR) of the Census Bureau through 2004:Q1; Internal Revenue Service Statistics of Income (IRS/SOI) preliminary data through 2002; securities offerings, mortgages, bank loans, commercial paper, and other loans through 2004:Q2. Statistics of Income data since 2002.
4. Nonfarm noncorporate business (tables F.103 and L.103) IRS/SOI data through 2001; bank and finance company loans and mortgage borrowing through 2004:Q2. Statistics of Income data since 2001.
5. Farm business (tables F.104 and L.104) Mortgages, bank loans, loans from government-sponsored enterprises, U.S. government loans to farms, and equity in government-sponsored enterprises through 2004:Q2; preliminary data for checkable deposits and currency and trade payables through 2003. Consumption of fixed capital and undistributed profits since 2000.
6. State and local governments (tables F.105 and L.105) Gross offerings and retirements of municipal securities, deposits at banks, s and nonmarketable U.S. government security issues through 2004:Q2; selected financial assets through 2003:Q2 from the comprehensive annual financial reports of state and local governments that account for most of the holdings of the sector, and data from Standard & Poor's on local government investment pools. Selected financial asset items ince 2003:Q2.
7. Federal government (tables F.106 and L.106) Data from the Monthly Treasury Statement of Receipts and Outlays through 2004:Q2; Treasury data for loan programs through 2004:Q2. None.
8. Rest of the world (U.S. international transactions) (tables F.107 and L.107) Balance of payments data through 2004:Q2; NIPA estimates; data from bank Reports of Condition and Treasury International Capital System through 2004:Q2. None
9. Monetary authority (tables F.108 and L.108) All data through 2004:Q2. None.
10. Commercial banking (tables F.109 through F.113 and tables L.109 through L.113) All data through 2004:Q2 for U.S.-chartered commercial banks, foreign banking offices in the U.S., bank holding companies, and commercial banks in U.S.-affiliated areas. Data since 2003 for branches of domestic commercial banks located in U.S.-affiliated areas.
11. Savings institutions (tables F.114 and L.114) All data through 2004:Q2. None.
12. Credit unions (tables F.115 and L.115) All data through 2004:Q2. None.
13. Bank personal trusts and estates (tables F.116 and L.116) All data through 2003:Q4; total assets for 2004:Q1 and 2004:Q2. Asset detail for 2004:Q1 and 2004:Q2.
14. Life insurance companies (tables F.117 and L.117) All data through 2004:Q1; preliminary data for 2004:Q2. Final data for 2004:Q2.
15. Other insurance companies (tables F.118 and L.118) All data through 2004:Q1; preliminary data for 2004:Q2. Final data for 2004:Q2.
16. Private pension funds (tables F.119 and L.119) Quarterly data through 2004:Q2; Internal Revenue Service/Department of Labor/Pension Benefit Guaranty Corporation Form 5500 data through 1999. Form 5500 data since 1999.
17. State and local government employee retirement funds (tables F.120 and L.120) All data through 2003:Q4. Data since 2003:Q4.
18. Federal government retirement funds (tables F.121 and L.121) Data from the Monthly Treasury Statement, the Thrift Savings Plan, and the National Railroad Retirement Investment Trust through 2004:Q2. None.
19. Money market mutual funds (tables F.122 and L.122) All data through 2004:Q2. None.
20. Mutual funds (tables F.123 and L.123) All data through 2004:Q2. None.
21. Closed-end funds (tables F.124 and L.124) All data through 2004:Q2. None.
22. Exchange-traded funds (tables F.124 and L.124) All data through 2004:Q2. None.
23. Government-sponsored enterprises (tables F.125 and L.125) Data for Fannie Mae, FHLBs, FCS, Farmer Mac, Sallie Mae, FICO, and REFCORP through 2004:Q2. Data after 2003:Q4 for Freddie Mac.
24. Agency- and GSE-backed mortgage pools (tables F.126 and L.126) All data through 2004:Q2. None.
25. Issuers of asset-backed securities (ABSs) (tables F.127 and L.127) All data for private mortgage pools, consumer credit, business loans, student loans, consumer leases, and trade credit securitization through 2004:Q2. None.
26. Finance companies (tables F.128 and L.128) All data through 2004:Q2. None.
27. Mortgage companies (tables F.129 and L.129) Mortgage data through 1997:Q4. Data after 1997:Q4.
28. Real estate investment trusts (REITs) (tables F.130 and L.130) Data from SNL REIT DataSource through 2004:Q2. None.
29. Security brokers and dealers (tables F.131 and L.131) Data for firms filing FOCUS and FOGS reports through 2004:Q2. None.
30. Funding corporations (tables F.132 and L.132) Estimates for this sector are largely residuals and are derived from data for other sectors.

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