Recent Developments in Household Net worth and Domestic Financial Debt

The net worth of households and nonprofits rose to $96.2 trillion during the second quarter of 2017. The value of directly and indirectly held corporate equities increased $1.1 trillion and the value of real estate increased $0.6 trillion.

Domestic nonfinancial debt outstanding was $47.9 trillion at the end of the second quarter of 2017, of which household debt was $14.9 trillion, nonfinancial business debt was $13.9 trillion, and total government debt was $19.1 trillion.

Domestic nonfinancial debt expanded at a seasonally adjusted annual rate of 3.8 percent in the second quarter of 2017, up from an annual rate of 1.7 percent in the previous quarter.

Household debt increased at an annual rate of 3.7 percent in the second quarter of 2017. Consumer credit grew 4.6 percent, while mortgage debt (excluding charge-offs) grew 2.8 percent at an annual rate.

Nonfinancial business debt rose at an annual rate of 5.3 percent in the second quarter of 2017, down from an annual growth rate of 6.1 percent in the previous quarter.

Federal government debt increased 3.6 percent at a seasonally adjusted annual rate in the second quarter of 2017, after declining at an annual rate of 2.6 percent in the previous quarter.

State and local government debt debt contracted at an annual rate of 1 percent in the second quarter of 2017, following a 3.4 percent rate of decline in the previous quarter.

Household Net Worth and Growth of Nonfinancial Debt

Year	Household Net Worth1	Growth of domestic nonfinancial debt; Total 2	Growth of domestic nonfinancial debt; Households	Growth of domestic nonfinancial debt; Businesses	Growth of domestic nonfinancial debt; Federal government	Growth of domestic nonfinancial debt; State and local govt's
2007	66,738	8.2	7.1	12.5	4.7	6.2
2008	56,418	5.8	0.0	5.7	21.4	1.3
2009	58,260	3.6	0.4	-4.0	20.4	4.5
2010	61,884	4.4	-0.4	-0.7	18.5	2.5
2011	62,956	3.5	-0.4	2.7	10.8	-1.4
2012	68,769	5.0	2.0	4.5	10.1	-0.2
2013	78,536	3.8	1.8	4.7	6.7	-1.8
2014	83,635	4.3	3.0	6.1	5.4	-1.1
2015	86,696	4.5	2.9	6.9	5.0	0.3
2016	92,172	4.6	3.6	5.6	5.6	1.0
2015:Q2	86,051	4.6	3.8	8.2	3.4	0.2
2015:Q3	84,835	2.1	1.3	5.3	0.6	0.4
2015:Q4	86,696	8.1	4.1	5.9	15.6	-0.9
2016:Q1	87,211	5.5	2.5	9.2	6.2	0.7
2016:Q2	88,003	4.6	4.4	4.0	5.7	2.2
2016:Q3	90,228	5.1	3.5	6.4	6.3	0.7
2016:Q4	92,172	3.1	3.8	2.3	3.6	0.4
2017:Q1	94,498	1.7	3.4	6.1	-2.6	-3.4
2017:Q2	96,196	3.8	3.7	5.3	3.6	-1.0

1. Shown on table B.101, which includes nonprofit organizations. Billions of dollars; amounts outstanding end of period, not seasonally adjusted Return to table
2. Percentage changes calculated as seasonally adjusted flow divided by previous quarter's seasonally adjusted level, shown at an annual rate Return to table

Release Highlights Second Quarter 2017

Topic	Description
National income and product accounts annual revision	The statistics in this publication reflect annual revisions to the national income and product accounts (NIPAs) from 2014:Q1 forward released by the Bureau of Economic Analysis (BEA) of the Department of Commerce on July 28, 2017, and subsequent information for 2017:Q2 released on August 30, 2017. The August 2017 issue of the Survey of Current Business provides details on the major features of this annual revision.
Fixed assets annual benchmark	Data for investment and depreciation flows and capital stocks for all sectors have been revised beginning in 2014 to reflect updated annual estimates of fixed assets from the BEA.
Seasonal adjustment	Seasonal factors for quarterly flows have been recalculated for the period 2007:Q1 forward. The seasonal factors are generated using the X-12-ARIMA seasonal adjustment program from the U.S. Census Bureau.
Private pension fund benchmark	Assets of the private pension fund sector (tables F.118, F.118.b, F.118.c, L.118, L.118.b, and L.118.c) have been revised beginning in 2015:Q1 to reflect new data from the U.S. Internal Revenue Service/Department of Labor/Pension Benefit Guaranty Corporation Form 5500 filed for plan year 2015.
Private pension funds holdings of debt securities reported at market value	Beginning in 2006:Q1, debt securities held by the private pension fund sector (tables F.118, F.118.b, F.118.c, L.118, L.118.b, and L.118.c) are reported at market value, consistent with the international standards described in the System of National Accounts (SNA2008).
National Railroad Retirement Investment Trusts holdings of debt securities reported at market value and new estimation method	Debt securities held by the National Railroad Retirement Investment Trust (NRRIT), a small component of the federal government employee retirement funds: defined benefit plans sector (tables F.119.b and L.119.b), are now reported at market value beginning in 2002:Q3. Additional revisions to series derived from NRRIT data sources reflect an improved estimation method based on annual financial statements.
Federal government employee retirement funds: defined contribution plans holdings of debt securities reported at market value	Debt securities held in the Federal Employees Retirement System (FERS) Thrift Savings Plan (TSP) F fund, part of the federal government employee retirement funds: defined contribution plans sector (table F.119.c and L.119.c), are now reported at market value beginning in 1988:Q1. The valuation of debt securities held in the TSP G fund is unchanged because they are nonmarketable.
State and local government employee retirement funds: defined benefit plans holdings of debt securities reported at market value and new estimation method	Debt securities held in the state and local government employee retirement funds: defined benefit plans sector (tables F.120.b and L.120.b) are now reported at market value. Also, a new method based on fund-level individual-unit file data from the Census Annual Survey of Public Pensions is now used to estimate checkable deposits, time and savings deposits, agency and GSE-backed securities, and domestic corporate bonds. Revisions begin in 2002:Q2.
Finance company benchmark	The finance company sector (tables F.128 and L.128) has been revised from 2015:Q4 forward to incorporate the Federal Reserve 2015 Census of Finance Companies (CFC) and Survey of Finance Companies (SFC). The CFC and SFC are conducted every five years.
Rest of the world sector revision	Revisions to the rest of the world sector (tables F.133 and L.133) reflect revised estimates of the U.S. international transactions accounts (ITAs) and the U.S. international investment position (IIP) accounts released by BEA for 1999:Q1 forward. BEA's changes are detailed in the July 2017 Survey of Current Business.

Explanatory Notes

Financial Accounts of the United States

The Statistical Release Z.1, "Financial Accounts of the United States," is organized into the following sections:

• Matrices summarizing flows and levels across sectors, tables on debt growth, net national wealth, gross domestic product (GDP), national income, saving, and so on
• Flows of financial assets and liabilities, by sector and by financial instrument
• Levels of financial assets and liabilities, by sector and by financial instrument
• Balance sheets, including nonfinancial assets, and changes in net worth for households and nonprofit organizations, nonfinancial corporate businesses, and nonfinancial noncorporate businesses
• Supplementary tables providing equity detail of the household and nonprofit organization sector and data on nonprofit organizations
• Integrated Macroeconomic Accounts

The Integrated Macroeconomic Accounts (IMA) relate production, income, saving, and capital formation from the national income and product accounts (NIPA) to changes in net worth from the "Financial Accounts" on a sector-by-sector basis. The IMA are published jointly by the Federal Reserve Board and the Bureau of Economic Analysis and are based on international guidelines and terminology as defined in the System of National Accounts (SNA2008).

Federal Reserve Board staff have taken many steps over the past several years to conform the "Financial Accounts" with the SNA guidelines. Nonetheless, a few important differences remain. In particular, in the "Financial Accounts":

• The purchase of consumer durables is treated as investment rather than as consumption.
• Nonfinancial noncorporate businesses (which are often small businesses) are shown in a separate sector rather than being included in the household sector.
• Most debt securities are recorded at book value rather than market value.

Concepts of Level and Flow in the SNA and the Financial Accounts

The level of an asset or liability (also referred to as the stock or outstanding) measures the value of the asset or liability in existence at a point in time. In the "Financial Accounts," the levels are reported as of the end of each calendar quarter. In the SNA2008, the change in the level from one period to the next is called the "economic flow," and can be decomposed into three broad elements: transactions, which measure the exchange of assets; revaluations, which measure changes in market value of untraded assets; and other changes in volume, which measure discontinuities or breaks in time series due to disaster losses or a change in source data or definition.

In the "Financial Accounts," "flows" refer to the exchange of assets, corresponding to the SNA definition of transactions, that is, "flow tables" in the "Financial Accounts" are equivalent to "transaction tables" in the SNA terminology. In practice, other volume changes are relatively rare, and revaluations occur only for series carried at market value (such as corporate equities and mutual fund shares), so for many series the change in the level is equal to the flow.

Growth Rates

Growth rates calculated from levels will include revaluations and other changes in volume. To isolate the effect of transactions on growth of a given asset or liability, users should calculate the ratio of the flow in a given period to the level in the preceding period.

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. Growth rates calculated from changes in unadjusted levels may differ from those in table D.1.

Seasonal Adjustment

Seasonal factors are recalculated and updated every year, and these revised factors are first published in the September release of second-quarter data. All series that exhibit significant seasonal patterns are adjusted. The seasonal factors are generated using the X-12-ARIMA seasonal adjustment program from the U.S. Census Bureau, estimated using the most recent 10 years of data. Because the effects of the recent financial crisis resulted in large outliers in some series that would have distorted the estimated seasonal factors, seasonal factors for some series were extrapolated using pre-crisis data. Seasonally adjusted levels shown in table D.3 are derived by carrying forward year-end levels by seasonally adjusted flows.

Data Revisions

Data shown for the most recent quarters are based on preliminary and potentially incomplete information. A summary list of the most recent data available for each sector is provided in a table following these notes. Nonetheless, when source data are revised or estimation methods are improved, all data are subject to revision. There is no specific revision schedule; rather, data are revised on an ongoing basis. In each release of the "Financial Accounts," major revisions are highlighted at the beginning of the publication.

Discrepancies

The data in the "Financial Accounts" come from a large variety of sources and are subject to limitations and uncertainty due to measurement errors, missing information, and incompatibilities among data sources. The size of this uncertainty cannot be quantified, but its existence is acknowledged by the inclusion of "statistical discrepancies" for various sectors and financial instruments.

The discrepancy for a given sector is defined as the difference between the aggregate value of the sector's sources of funds and the value of its uses of funds. For a financial instrument category, the discrepancy is defined as the difference between the measurement of funds raised through the financial instrument and funds disbursed through that instrument. The relative size of the statistical discrepancy is one indication of the quality of the underlying source data. Note that differences in seasonal adjustment procedures sometimes result in quarterly discrepancies that partially or completely offset each other in the annual data.

Financial Accounts Guide

Substantially more detail on the construction of the "Financial Accounts" is available in the Financial Accounts Guide, which provides interactive, online documentation for each data series. The tools and descriptions in the guide are designed to help users understand the structure and content of the "Financial Accounts."

The guide allows users to search for series, browse tables of data, and identify links among series within these accounts. It also provides descriptions of each of the published tables and information on the source data underlying each series. Data on some of our data submissions to international organizations are also available on the guide page. There is also a link to the Enhanced Financial Accounts, a new initiative that includes data that is not part of the core "Financial Accounts".

The guide is not part of the quarterly release, but it is continually updated and kept consistent with the most recently published data. The guide and the data from the "Financial Accounts" are available free of charge online:

www.federalreserve.gov/apps/fof

Each input and calculated series in the Z.1 is identified according to a unique string of patterned numbers and letters. The series structure page of the guide provides a breakdown of what the letters and numbers represent in the series mnemonics. The relationships between different components of a series (for example, levels, seasonally adjusted annual rate flows, unadjusted flows, revaluations, other changes in volume, seasonal factors, and so on) are also described on the series structure page.

Production Schedule

The "Financial Accounts" are published online and in print four times per year, about 10 weeks following the end of each calendar quarter. The publication with series mnemonics and the guide are available online:

www.federalreserve.gov/releases/Z1

This website also provides CSV files of quarterly data for seasonally adjusted flows, unadjusted flows, outstandings, balance sheets, debt (tables D.1, D.2, and D.3), supplementary tables, and the IMA.

In addition, the data are available as customizable datasets through the Federal Reserve Board's Data Download Program at:

www.federalreserve.gov/datadownload/default.htm

Print Subscription Information

The Federal Reserve Board charges a fee for subscriptions to print versions of statistical releases. Inquiries regarding print versions should be directed to the following office:

Publications Services, Stop 127
Board of Governors
of the Federal Reserve System
20th Street and Constitution Avenue, N.W.
Washington, DC 20551
(202) 452 3245

Description of Most Recent Data Available

Sector Table	Available at time of publication
National income and product accounts (NIPA) (various tables)	Second estimate, seasonally adjusted, for 2017:Q2. Unadjusted flows through 2015:Q4 for the government sectors.
Households and nonprofit organizations sector (tables F.101 and L.101)	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 2017:Q2. The source for nonprofit organizations data (tables F.101.a and L.101.a) is the Internal Revenue Service Statistics of Income (IRS/SOI). Data for nonprofit organizations are available annually for 1987 through 2013.
Nonfinancial corporate business (tables F.103 and L.103)	Quarterly Financial Report (QFR) of the Census Bureau through 2017:Q2; IRS/SOI data through 2015; securities offerings, mortgages, bank loans, commercial paper, and other loans through 2017:Q2. Corporate farm data through 2016.
Nonfinancial noncorporate business (tables F.104 and L.104)	IRS/SOI data through 2014; bank and finance company loans, and mortgage borrowing through 2017:Q2. Noncorporate farm data through 2016.
Federal government (tables F.106 and L.106)	Data from the Monthly Treasury Statement of Receipts and Outlays, Monthly Statement of the Public Debt, Troubled Assets Relief Program (TARP), and Treasury data for loan programs through 2017:Q2.
State and local governments (tables F.107 and L.107)	Gross offerings and retirements of municipal securities, deposits at banks, and nonmarketable U.S. government security issues through 2017:Q2; total financial assets through 2014:Q2 from the Census Bureau; breakdown of financial assets through 2011:Q2 from the comprehensive annual financial reports of state and local governments.
Monetary authority (tables F.109 and L.109)	All data through 2017:Q2.
U.S.-chartered depository institutions (tables F.111 and L.111)	All data through 2017:Q2.
Foreign banking offices in U.S. (tables F.112 and L.112)	All data through 2017:Q2.
Banks in U.S.-affiliated areas (tables F.113 and L.113)	All data through 2017:Q2.
Credit unions (tables F.114 and L.114)	All data through 2017:Q2.
Property-casualty insurance companies (tables F.115 and L.115)	All data through 2017:Q2.
Life insurance companies (tables F.116 and L.116)	All data through 2017:Q2.
Private pension funds (tables F.118 and L.118)	Internal Revenue Service/Department of Labor Form 5500 data through 2015. Investment Company Institute data through 2017:Q1. Annual actuarial liability data through 2016:Q4.
Federal government retirement funds (tables F.119 and L.119)	Data from the Monthly Treasury Statement of Receipts and Outlays, the Thrift Savings Plan, and the National Railroad Retirement Investment Trust through 2017:Q2. Annual actuarial liability data through 2016:Q4.
State and local government employee retirement funds (tables F.120 and L.120)	Detailed annual survey data through 2016:Q2 and quarterly survey data through 2017:Q1 from the Census Bureau. Investment Company Institute data through 2017:Q1. Annual actuarial liability data through 2016:Q4.
Money market mutual funds (tables F.121 and L.121)	All data through 2017:Q2.
Mutual funds (tables F.122 and L.122)	All data through 2017:Q2.
Closed-end funds (tables F.123 and L.123)	All data through 2017:Q2.
Exchange-traded funds (tables F.124 and L.124)	All data through 2017:Q2.
Government sponsored enterprises (GSEs) (tables F.125 and L.125)	Data for Fannie Mae, Freddie Mac, FICO, REFCORP, Farmer Mac, FCS, and FHLB through 2017:Q2.
Agency- and GSE-backed mortgage pools (tables F.126 and L.126)	Data for Fannie Mae, Freddie Mac, Farmer Mac, and Ginnie Mae through 2017:Q2.
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 2017:Q2.
Finance companies (tables F.128 and L.128)	All data through 2017:Q2.
Real estate investment trusts (REITs) (tables F.129 and L.129)	All data through 2017:Q2.
Security brokers and dealers (tables F.130 and L.130)	Data for firms filing FOCUS and FOGS reports through 2017:Q2.
Holding companies (table F.131 and L.131)	All data through 2017:Q2.
Funding corporations (tables F.132 and L.132)	Estimates for this sector are largely residuals and are derived from data for other sectors.
Rest of the world (tables F.133 and L.133)	NIPA estimates, bank Call Reports, Treasury International Capital System, and Balance of Payments through 2017:Q2. International Investment Position data through 2017:Q1.

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