                                                                     For use at 12:00 p.m., eastern time
                                                                                              Thursday
                                                                                        March 6, 2008




FEDERAL RESERVE statistical release


Z.1




Flow of Funds Accounts
of the United States

Flows and Outstandings
Fourth Quarter 2007




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




                                           Fourth Quarter 2007

         Debt of the domestic nonfinancial sectors is         rate of 12 percent in the fourth quarter of 2007, the
estimated to have expanded at a seasonally adjusted           same as in the previous quarter. Stronger bond and
annual rate of 7 percent in the fourth quarter of 2007,      commercial paper issuance offset weaker C&I and
about one percentage point slower than in the previous        commercial mortgage lending. Nonfinancial business
quarter.  The deceleration in the fourth quarter was          debt increased 11 percent over 2007.
concentrated in the household and federal government
sectors. Domestic nonfinancial debt rose 8 percent over                 State and local government debt increased at
2007 as a whole,  percentage point slower than in            an annual rate of 7 percent last quarter and expanded
2006.                                                         9    percent  during    2007    as  a   whole.  Federal
                                                              government debt expanded at an annual rate of
         Household debt expanded at an annual rate of         5 percent in the fourth quarter of last year, and
5 percent in the fourth quarter of 2007, 1 percentage       increased 5 percent for the year as a whole.
points below the pace in the previous quarter. In the
fourth  quarter,  growth   of  home     mortgage    debt                At the end of the fourth quarter of 2007, the
decreased to a rate of 5 percentthe slowest quarterly         level of domestic nonfinancial debt outstanding was
pace since 1997--and consumer credit rose at an annual        $31.2 trillion; household debt was $13.8 trillion,
rate of 4 percent. For 2007 as a whole, household debt        nonfinancial business debt was $10.1 trillion, and total
increased 6 percent, about 3 percentage points less         government debt was $7.3 trillion.
than in 2006. The deceleration of household debt last
year owed mainly to much slower growth of home                          Household net worth--the difference between
mortgage debt.                                                the value of assets and liabilities--was an estimated
                                                              $57.7 trillion at the end of the fourth quarter of 2007,
         Nonfinancial business debt rose at an annual         $0.5 trillion dollars less than in the preceding 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.
 1998                       6.7                   7.8          11.8                  6.3                  -1.4
 1999                       6.3                   8.3          10.5                  3.4                  -1.9
 2000                       4.9                   9.1           9.0                  1.3                  -8.0
 2001                       6.3                   9.6           5.7                  8.8                  -0.2
 2002                       7.3                  10.9           2.4                11.0                    7.6

 2003                       8.1                  11.5           2.5                  8.3                  10.9
 2004                       8.8                  11.2           5.8                  7.4                   9.0
 2005                       9.2                  11.1           7.7                10.2                    7.0
 2006                       8.7                  10.2           9.6                  8.2                   3.9
 2007                       8.1                   6.8          11.6                  9.2                   4.9

 2006:Q1                   10.2                  11.5          10.6                  5.5                   8.0
       Q2                   8.4                  11.4           8.5                  7.3                   1.0
       Q3                   7.2                   8.8           6.8                  7.7                   3.6
       Q4                   8.1                   7.4          11.3                11.2                    2.8

 2007:Q1                    7.9                   6.8           9.5                11.2                    6.7
       Q2                   7.1                   7.2          10.9                10.3                   -1.4
       Q3                   8.8                   6.8          12.0                  6.5                   8.8
       Q4                   7.7                   5.6          12.0                  7.6                   5.1
1. Changes shown are on an end-of-period basis.

                                              Table of Contents



Title                                                                            Table     Page



Flow of Funds Accounts, Fourth 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 2007                                             114                115

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




                      Flow of Funds Accounts, Fourth Quarter 2007

          This publication presents the flow of funds       loans and advances; it excludes trade debt, loans for the
accounts for 2007:Q4.                                       purpose of carrying securities, and funds raised from
                                                            equity sources.
Data revisions and other changes. The statistics in
the attached tables reflect the use of new or revised                Growth rates in table D.1 are calculated by
source data. Most significant revisions appear in recent    dividing seasonally adjusted flows from table D.2 by
quarters; however, new source information resulted in       seasonally adjusted levels at the end of the previous
changes to data for earlier periods.                        period from table D.3. Seasonally adjusted levels in
                                                            flow of funds statistics are derived by carrying forward
1.        Assets of the nonfarm nonfinancial corporate      year-end levels by seasonally adjusted flows. Growth
business sector (tables F.102 and L.102) were revised       rates calculated from changes in unadjusted levels
from 2005:Q1 onward to reflect final data from the          printed in table L.2 can differ from those in table D.1.
Internal Revenue Service (IRS) Statistics of Income
(SOI) for 2005.                                             Relation of Flows to Outstandings.                       Estimates of
                                                            financial assets and liabilities outstanding are linked to
2.        In the nonfarm noncorporate business sector       data on flows.        However, figures on outstandings
(tables F.103 and L.103), data have been revised from       contain discontinuities or breaks in series that could
2005:Q1    onward,   owing   to  benchmark    statistics    affect analysis of particular relationships over time.
available from the IRS/SOI for 2005.                        Specifically, outstanding in the flow of funds accounts
                                                            are related to the flows in the following way:
3.        Agency- and GSE-backed securities and U.S.
corporate bonds assets for the rest of the world sector     Outstanding = Outstanding
                                                                         t                    t-1     + Flow + Discontinuity
                                                                                                                 t                 t
                                                                            B
                                                                              B
                                                                                                B
                                                                                                       B
                                                                                                                B
                                                                                                                  B
                                                                                                                                    B
                                                                                                                                      B




(tables L.107, L.210, and L.212) have been revised          where "t" is the time period.

from 1978:Q4 onward to reflect a revised methodology
                                                                     Discontinuities         result         from      changes     in
in using International Investment Position data.
                                                            valuation, breaks in source data, and changes in
                                                            definitions.       For most     series,        the      value     of the
4.        The credit union sector (tables F.115, F.212,
                                                            discontinuity is zero for nearly all time periods.
L.115, and L.212) was modified beginning in 2002 to
                                                            However, in a few instances, the discontinuity is
include an additional asset category: corporate and
                                                            nonzero for almost all time periods, or is quite large in a
foreign bonds held by the U.S. Central Federal Credit
                                                            particular quarter, such as a period when there is a
Union.
                                                            sharp increase or decrease in equity prices or a major
                                                            break in source data.
5.        For the private pension fund sector (tables
F.118, F.118.b, F.118.c, L.118, L.118.b, and L.118.c),
                                                                     The discontinuities in a series can distort
estimates have been revised from 2005:Q1 onward to
                                                            estimated rates of growth in assets and liabilities
reflect new data from the U.S. Internal Revenue
                                                            between    periods.           In order         to      minimize    these
Service/Department of Labor/Pension Benefit Guaranty
                                                            distortions, percentage changes in assets and liabilities
Corporation Form 5500 filed for plan year 2005.
                                                            in flow of funds releases should be calculated as:

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




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

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

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

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

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

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

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

consumer credit, U.S. government loans, and other           and preliminary versions of data, but rather between

2


those source estimates that are fully ready when the                   The Internet site also provides quarterly data
latest quarterly publication is compiled and those that       beginning in 1952, organized in compressed files that
are not yet completed.     However, the items that are        correspond to the tables published in this release.
shown as available are, in general, also preliminary in       There are files for quarterly data for seasonally adjusted
the sense that they are subject to revision by source         flows, unadjusted flows, outstandings, balance sheets,
agencies.                                                     and debt (tables D.1, D.2, and D.3).

Margins of Uncertainty. Flow of funds statistics are                   A Guide to the Flow of Funds Accounts
subject to uncertainties resulting from measurement           is available. The 1,200-page Guide, published in two
errors in source data, incompatibilities among data from      volumes in January 2000, explains in detail how the
different sources, potential revisions in both financial      U.S. financial accounts are prepared and the principles
and nonfinancial series, and incomplete data in parts of      underlying the accounts. The Guide can be purchased
the accounts. The size of these uncertainties cannot be       for $20.00 from the Board's Publications Services.
quantified in precise statistical terms, but allowance for    Publications Services accepts orders accompanied by
them is explicitly made throughout the accounts by the        checks as well as credit card orders.
inclusion of "discrepancies" for various sectors and                   The Internet site for this release at the location
instrument types.   A discrepancy for a sector is the         shown above contains a link to an order form for the
difference between its measured sources of funds and          Guide that can be mailed or faxed to Publications
its measured uses of funds. For an instrument category,       Services. In addition, the Internet site includes a link to
a discrepancy is the difference between measured funds        the Guide's descriptions of the tables in the flow of
borrowed    through    the   financial   instrument   and     funds accounts.
measured funds lent through that instrument. The size
of such discrepancies relative to the main asset or           Subscription Information.         The Federal Reserve
liability components is one indication of the quality of      Board charges for subscriptions to all statistical
source data,   especially on     an  annual    basis. For     releases. Inquiries for releases should be directed to:
quarterly data, differences in seasonal adjustment
procedures for financial and nonfinancial components                     Publications Services, Stop 127
of the accounts sometimes result in discrepancies that                          Board of Governors
cancel in annual data.                                                    of the Federal Reserve System
                                                                   20th Street and Constitution Avenue, N.W.
Availability of Data.    Flow of     funds statistics are                     Washington, DC 20551
updated about ten weeks following the end of a quarter.                           (202) 452-3244
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:

http://www.federalreserve.gov/releases/Z1

                                                                                                                 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:Q4.

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:Q4. 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:Q3;            2005.
   (tables F.102 and L.102)         Internal Revenue Service Statistics of
                                    Income (IRS/SOI) final data through
                                    2005; securities offerings, mortgages,
                                    bank loans, commercial paper, and
                                    other loans through 2007:Q4.

4. Nonfarm noncorporate             IRS/SOI data through 2005; bank and           Statistics of Income data since
   business                         finance company loans and mortgage            2005.
   (tables F.103 and L.103)         borrowing through 2007:Q4.

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:Q4;
                                    preliminary data for checkable deposits
                                    and currency and trade payables
                                    through 2007.

6. State and local governments      Gross offerings and retirements of            Selected financial asset items
  (tables F.105 and L.105)          municipal securities, deposits at banks,      since 2004:Q2.
                                    and nonmarketable U.S. government
                                    security issues through 2007:Q4; 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:Q4.

4


 8. Rest of the world                 Balance of payments data through         Balance of payments data for
    (U.S. international               2007:Q3. NIPA estimates; data from       2007:Q4.
     transactions)                    bank Reports of Condition and from
    (tables F.107 and L.107)          Treasury International Capital System
                                      through 2007:Q4.


 9.  Monetary authority               All data through 2007:Q4.                None.
     (tables F.108 and L.108)


 10. Commercial banking               All data through 2007:Q4 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:Q4.                None.
    (tables F.114 and L.114)

 12. Credit unions                    All data through 2007:Q4.                None.
    (tables F.115 and L.115)

 13. Property-casualty insurance      Final data for 2007:Q3.                  Data for 2007:Q4.
     companies
    (tables F.116 and L.116)

 14. Life insurance companies         Final data for 2007:Q3.                  Data for 2007:Q4.
    (tables F.117 and L.117)

 15. Private pension funds            Quarterly data through 2007:Q4;          Form 5500 data since 2005.
    (tables F.118 and L.118)          Internal Revenue Service/Department
                                      of Labor/Pension Benefit Guaranty
                                      Corporation Form 5500 data through
                                      2005.

 16. State and local government       Detailed data through 2006:Q2 from       Detailed data since 2006:Q2 and
    employee retirement funds         the Census Bureau; sample data           sample data since 2007:Q3.
    (tables F.119 and L.119)          through 2007:Q3 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:Q4.

 18. Money market mutual              All data through 2007:Q4.                None.
    funds
    (tables F.121 and L.121)

 19. Mutual funds                     All data through 2007:Q4.                None.
    (tables F.122 and L.122)


 20. Closed-end funds                 All data through 2007:Q4.                None.
    (tables F.123 and L.123)

 21. Exchange-traded funds            All data through 2007:Q4.                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 2007:4.

 23. Agency- and GSE-backed      All data through 2007:Q4.                   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:Q4.

 25. Finance companies           All data through 2007:Q4.                   None.
    (tables F.127 and L.127)

 26. Real estate investment      Data from SNL REIT DataSource               None.
    trusts (REITs)               through 2007:Q4.
    (tables F.128 and L.128)

                                                                             None.
 27. Security brokers and        Data for firms filing FOCUS and
    dealers                      FOGS reports through 2007:Q4.
    (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.

