For use at 12:00 p.m., eastern time 

Thursday 

September 16, 2004 

FEDERAL RESERVE statistical release

Z.1 

Flow of Funds Accounts 

of the United States

Flows and Outstandings

Second Quarter 2004

Board of Governors of the Federal Reserve System, Washington DC 20551
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 

Nonfederal

Total Federal Total Households Business

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

2003: Q1 7.4 5.1 7.9 11.3 4.0 6.9

 Q2 11.0 19.6 9.1 11.6 5.7 11.3

 Q3 7.0 8.2 6.8 9.5 3.3 7.2

 Q4 6.3 9.1 5.7 7.0 3.8 6.3

2004: Q1 9.1 12.0 8.5 11.3 4.8 9.5

 Q2 7.7 10.7 7.0 9.5 4.4 4.6

1. Changes shown are on an end-of-period basis. 
Table of Contents 

Title Table Page 

Flow of Funds Accounts, Second Quarter 2004 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 

Bank Personal Trusts and Estates F.116 29 L.116 74 

Life Insurance Companies F.117 30 L.117 75 

Other Insurance Companies F.118 30 L.118 75 

Private Pension Funds F.119 31 L.119 76 

State and Local Government Employee Retirement Funds F.120 31 L.120 76 

Federal Government Retirement Funds F.121 31 L.121 76 

Money Market Mutual Funds F.122 32 L.122 77 
Flows Levels

Title Table Page Table Page

Mutual Funds F.123 32 L.123 77 

Closed-End and Exchange-Traded Funds F.124 32 L.124 77 

Government-Sponsored Enterprises F.125 33 L.125 78 

Agency- and GSE-backed Mortgage Pools F.126 33 L.126 78 

Issuers of Asset-Backed Securities F.127 34 L.127 79 

Finance Companies F.128 34 L.128 79 

Mortgage Companies F.129 35 L.129 80 

Real Estate Investment Trusts F.130 35 L.130 80 

Security Brokers and Dealers F.131 36 L.131 81 

Funding Corporations F.132 36 L.132 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 

Investment in Bank Personal Trusts F.227 52 L.227 97 

Proprietors' Equity in Noncorporate Business F.228 52 

Total Miscellaneous Financial Claims F.229 53 L.229 98 

Identified Miscellaneous Financial Claims - Part I F.230 54 L.230 99 

Identified Miscellaneous Financial Claims - Part II F.231 55 L.231 100 

Unidentified Miscellaneous Financial Claims F.232 56 L.232 101 

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.119.b 112 L.119.b 113 

Private Pension Funds: Defined Contribution Plans F.119.c 112 L.119.c 113 

Individual Retirement Accounts (IRAs) F.225.i 112 L.225.i 113 

Flow of Funds Matrix for 2003 114 115 

Balance Sheet of Households and Nonprofit Organizations 

 with Equity Detail B.100.e 116 

1

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 GSEbacked 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, loansfor 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 
2

and preliminary versions of data, but rather between 

those source estimates that are fully ready when the 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). 

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. 

 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. 

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 

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. 

of such discrepancies relative to the main asset or 

liability components is one indication of the quality of Subscription Information. The Federal Reserve 

Board charges for subscriptions to all statistical 

releases. Inquiries for releases should be directed to: 

source data, especially on an annual basis. For 

quarterly data, differences in seasonal adjustment 

procedures for financial and nonfinancial components 

of the accounts sometimes result in discrepancies that Publications Services, Stop 127 

cancel in annual data. Board of Governors 

of the Federal Reserve System

Availability of Data. Flow of funds statistics are 20th Street and Constitution Avenue, N.W.

updated about ten weeks following the end of a Washington, DC 20551 

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: 

(202) 452-3244

http://www.federalreserve.gov/releases/Z1
3 

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, 

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

since 2003:Q2. 
4 

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. 
5 

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.