Recent Developments in Household Net worth and Domestic Financial Debt

The net worth of households and nonprofits rose to $94.8 trillion during the first quarter of 2017. The value of directly and indirectly held corporate equities increased $1.3 trillion and the value of real estate increased $0.5 trillion.

Domestic nonfinancial debt outstanding was $47.5 trillion at the end of the first quarter of 2017, of which household debt was $14.9 trillion, nonfinancial business debt was $13.7 trillion, and total government debt was $18.9 trillion.

Domestic nonfinancial debt growth was 1.4 percent at a seasonally adjusted annual rate in the first quarter of 2017, down from an annual rate of 2.8 percent in the previous quarter.

Household debt increased at an annual rate of 3.2 percent in the first quarter of 2017. Consumer credit grew 5 percent, while mortgage debt (excluding charge-offs) grew 3 percent at an annual rate.

Nonfinancial business debt rose at an annual rate of 6.2 percent in the first quarter of 2017, up from an annual growth rate of 2.2 percent in the previous quarter.

Federal government debt decreased 3.3 percent at a seasonally adjusted annual rate in the first quarter of 2017, down from an annual growth rate of 2.9 percent in the previous quarter.

State and local government debt fell at an annual rate of 3.5 percent in the first quarter of 2017, down from an annual growth rate of 0.1 percent in the previous quarter.

Household Net Worth and Growth of Nonfinancial Debt

Release Highlights First Quarter 2017

Topic	Description
International banking facilities revision	Data for international banking facilities (IBFs) of U.S.-chartered depository institutions and foreign banking offices in the U.S. (included on tables F.111, F.112, L.111, and L.112) have been extended back to 1981:Q4, when IBFs were first established. Previously, IBF data began in 1985:Q4. Also, several IBF series have been revised for periods after 1985 due to updated methodology.
Nonfinancial corporate business benchmark	Assets of the nonfinancial corporate business sector (tables F.103, L.103, B.103, and R.103) have been revised from 2015:Q1 forward to reflect new data from the Internal Revenue Service (IRS) Statistics of Income (SOI) for 2015.

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

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