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

 Thursday 

March 12, 2009 

FEDERAL RESERVE statistical release

Z.1 

 

Flow of Funds Accounts 

of the United States

Flows and Outstandings

Fourth Quarter 2008

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

Fourth Quarter 2008 

 Debt of the domestic nonfinancial sectors is 

estimated to have expanded at a seasonally adjusted 

annual rate of 61⁄4 percent in the fourth quarter of 2008, 

almost 2 percentage points less than in the previous 

quarter. The deceleration was evident in all sectors. 

For 2008 as a whole, domestic nonfinancial debt rose 

53⁄4 percent, about 23⁄4 percentage points below the 2007 

pace. 

 

 Household debt contracted at an annual rate of 

2 percent in the fourth quarter, following two quarters 

of very weak growth. In the fourth quarter, home 

mortgage debt decreased at an annual rate of 11⁄2 

percent, while consumer credit decreased at an annual 

rate of 31⁄4 percent. In 2008, household debt increased 

1⁄2 percent, 61⁄4 percentage points less than in the 

previous year. 

 Nonfinancial business debt rose at an annual 

rate of 13⁄4 percent in the fourth quarter, 21⁄2 percentage 

points less than in the previous quarter. The slowdown 

was concentrated in commercial paper, loans, and 

commercial mortgage borrowing. The 43⁄4 percent 

increase in nonfinancial business debt in 2008 was 

over 81⁄4 percentage points less than in the previous 

year. 

State and local government debt increased at 

an annual rate of 11⁄4 percent last quarter, and expanded 

21⁄4 percent over all of 2008. Federal government debt 

surged at an annual rate of 37 percent in the fourth 

quarter, similar to the third-quarter pace. In 2008, 

federal government debt rose more than 24 percent, 

after a 5 percent increase in 2007. 

 At the end of the fourth quarter of 2008, the 

level of domestic nonfinancial debt outstanding was 

$33.5 trillion; household debt was $13.8 trillion, 

nonfinancial business debt was $11.1 trillion, and total 

government debt was $8.6 trillion. 

 Household net worth—the difference between 

the value of assets and liabilities—was an estimated 

$51.5 trillion at the end of the fourth quarter of 2008, 

$5.1 trillion dollars less than in the preceding quarter. 

For 2008 as a whole, household net worth fell $11.2 

trillion. 

Growth of Domestic Nonfinancial DebtP

1

P

Percentage changes; quarterly data are seasonally adjusted annual rates 

 Total Households Business State and 

local govts. Federal 

1999 6.4 8.4 10.8 3.3 -1.9 

2000 5.0 9.1 9.3 1.4 -8.0 

2001 6.3 9.6 5.8 8.8 -0.2 

2002 7.3 10.8 2.6 11.1 7.6 

2003 8.1 11.6 2.5 8.3 10.9 

 

2004 8.9 11.2 6.2 7.4 9.0 

2005 9.5 11.1 8.7 10.2 7.0 

2006 8.9 10.0 10.5 8.2 3.9 

2007 8.6 6.6 13.1 9.3 4.9 

2008 5.8 0.4 4.8 2.2 24.2 

 

2007:Q1 8.1 7.0 10.5 10.9 5.5 

 Q2 8.1 7.2 12.9 10.0 0.3 

 Q3 9.1 5.9 14.3 7.2 8.0 

 Q4 8.0 5.6 12.4 7.7 5.3 

 

2008:Q1 5.2 3.0 7.2 3.5 8.1 

 Q2 3.1 0.3 5.8 0.9 5.9 

 Q3 8.1 0.2 4.1 3.1 39.2 

 Q4 6.3 -2.0 1.7 1.2 37.0 

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

Title Table Page 

Flow of Funds Accounts, Fourth Quarter 2008 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 2008 114 115 

Balance Sheet of Households and Nonprofit Organizations 

 with Equity Detail B.100.e 116 
Flow of Funds Accounts, Fourth Quarter 2008 

This publication presents the flow of funds 

accounts for 2008:Q4. 

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. Assets of the nonfarm nonfinancial corporate 

business sector (tables F.102 and L.102) were revised 

from 2006:Q1 onward to reflect final data from the 

Internal Revenue Service (IRS) Statistics of Income 

(SOI) for 2006. 

2. The federal government sector (tables F.106, 

L.106, F.106.c, and L.106.c) was modified to include 

an additional asset category, corporate equities, 

reflecting the federal government’s purchase of 

preferred shares issued by financial corporations under 

the Troubled Assets Relief Program (TARP) and by 

government-sponsored enterprises (GSEs). In addition, 

on F.106, net capital transfers (line 20) was adjusted to 

remove what the Bureau of Economic Analysis (BEA) 

assumed was the implied subsidy cost of capital 

injections to distressed businesses where the 

government acquired assets in 2008:Q4. On L.106, the 

value of corporate equities excludes this implied 

subsidy. 

3. The monetary authority sector (tables F.108 and 

L.108) has been expanded to show new asset detail for 

bank loans n.e.c. related to the creation of Maiden Lane 

II LLC, Maiden Lane III LLC, and Commercial Paper 

Funding Facility LLC (CPFF). 

4. For the private pension fund sector (tables F.118, 

F.118.b, F.118.c, L.118, L.118.b, and L.118.c), 

estimates have been revised from 2006:Q1 onward to 

reflect new data from the U.S. Internal Revenue 

Service/Department of Labor/Pension Benefit Guaranty 

Corporation Form 5500 filed for plan year 2006. 

5. The government-sponsored enterprises sector 

(table F.124) was modified to include an additional 

liability category, corporate equities. 

6. The finance companies sector (tables F.127 and 

L.127) was modified to include two additional asset 

categories, time and savings deposits and corporate 

bonds. Data for corporate bonds begin in 1984:Q1. 

Estimates of checkable deposits and time and savings 

deposits have been revised from 1945 forward to reflect 

new information available on the Domestic Finance 

Company Report of Consolidated Assets and Liabilities 

(FR2248). 

7. The funding corporation sector (table F.130) was 

modified to include an additional liability category, 

corporate equities, reflecting American International 

Group’s (AIG) issuance of preferred shares to the 

federal government in 2008:Q4 under the TARP. 

8. The market value of real estate (tables B.100, 

B.102, and B.103) has been revised from 2004:Q4 

forward due to a shift from using the NCREIF 

appraisal-based commercial and multi-family indexes to 

transaction-based indexes. 

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, 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: 

1
Outstanding B

tB = Outstanding Bt-1B+ Flow BtB+ Discontinuity BtB

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 B

tB = (Flow BtB / Outstanding Bt-1B) * 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. For 

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: 

www.federalreserve.gov/releases/Z1

 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). This data is also 

available as a customizable download dataset through 

the Data Download Program (DDP) at the following 

location: 

www.federalreserve.gov/datadownload/Choose.aspx?rel=Z.1 

 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

2 
Availability of Data for Latest Quarter 

UAvailable at time of publicationU UMajor items missingU

 1. National income and 

 product accounts (NIPA) 

Preliminary estimates, seasonally 

adjusted, for 2008:Q4. 

Unadjusted flows since 2007 for 

the government sectors. 

Unadjusted flows since 2006 for 

all other sectors. 

 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 2008: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 

 corporate business 

 (tables F.102 and L.102) 

Quarterly Financial Report (QFR) of 

the Census Bureau through 2008:Q3; 

Internal Revenue Service Statistics of 

Income (IRS/SOI) final data through 

2006; securities offerings, mortgages, 

bank loans, commercial paper, and 

other loans through 2008:Q4. 

Statistics of Income data since 

2006. QFR since 2008:Q3. 

 4. Nonfarm noncorporate 

 business 

 (tables F.103 and L.103) 

IRS/SOI data through 2006; bank and 

finance company loans and mortgage 

borrowing through 2008:Q4. 

Statistics of Income data since 

2006. 

 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 2008:Q4; 

preliminary data for checkable deposits 

and currency and trade payables 

through 2007. 

Consumption of fixed capital 

and undistributed profits since 

2007. 

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 2008:Q4; total 

financial assets through 2006:Q2 from 

the Census Bureau; breakdown of 

financial assets through 2004:Q2 from 

the comprehensive annual financial 

reports of state and local governments. 

Total financial assets since 

2006:Q2 and selected financial 

asset detail since 2004:Q2. 

7. Federal government 

 (tables F.106 and L.106) 

Data from the Monthly Treasury 

Statement of Receipts and Outlays and 

Treasury data for loan programs and 

the Troubled Assets Relief Program 

(TARP) through 2008:Q4. 

None. 

3 
 8. Rest of the world 

 (U.S. international 

 transactions) 

 (tables F.107 and L.107) 

Balance of payments data through 

2008:Q3. NIPA estimates; data from 

bank Reports of Condition and from 

Treasury International Capital System 

through 2008:Q4. 

Balance of payments data for 

2008:Q4. 

 9. Monetary authority 

 (tables F.108 and L.108) 

All data through 2008:Q4. None. 

10. Commercial banking 

 (tables F.109 through F.113 

 and tables L.109 through 

 L.113) 

All data through 2008:Q4 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 2007 for branches of 

domestic commercial banks 

located in U.S.-affiliated areas. 

11. Savings institutions 

 (tables F.114 and L.114) 

All data through 2008:Q4. None. 

12. Credit unions 

 (tables F.115 and L.115) 

All data through 2008:Q4. None. 

13. Property-casualty insurance 

companies 

 (tables F.116 and L.116) 

All data through 2008:Q3. Data for 2008:Q4. 

14. Life insurance companies 

 (tables F.117 and L.117) 

All data through 2008:Q3. Data for 2008:Q4. 

 

15. Private pension funds 

 (tables F.118 and L.118) 

Quarterly data through 2008:Q4; 

Internal Revenue Service/Department 

of Labor/Pension Benefit Guaranty 

Corporation Form 5500 data through 

2006. 

Form 5500 data since 2006. 

16. State and local government 

 employee retirement funds 

 (tables F.119 and L.119) 

Detailed data through 2006:Q2 from 

the Census Bureau; sample data 

through 2008:Q3 from the Census 

Bureau. 

Detailed data since 2006:Q2 and 

sample data for 2008:Q4. 

17. Federal government retirement 

 funds 

 (tables F.120 and L.120) 

Data from the Monthly Treasury 

Statement of Receipts and Outlays, the 

Thrift Savings Plan, and the National 

Railroad Retirement Investment Trust 

through 2008:Q4. 

None. 

18. Money market mutual 

 funds 

 (tables F.121 and L.121) 

All data through 2008:Q4. None. 

19. Mutual funds 

 (tables F.122 and L.122) 

All data through 2008:Q4. None. 

20. Closed-end funds 

 (tables F.123 and L.123) 

All data through 2008:Q4. None. 

21. Exchange-traded funds 

 (tables F.123 and L.123) 

All data through 2008:Q4. None. 

4 
22. Government-sponsored 

 enterprises 

 (tables F.124 and L.124) 

Data for Fannie Mae, FICO, FCS, and 

REFCORP through 2008:Q4 and for 

Freddie Mac, FHLBs, and Farmer Mac 

through 2008:Q3. 

Data for Freddie Mac, FHLBs, 

and Farmer Mac since 2008:Q3. 

23. Agency- and GSE-backed 

 mortgage pools 

 (tables F.125 and L.125) 

Data for Fannie Mae and Ginnie Mae 

through 2008:Q4 and for Freddie Mac 

through 2008:Q3. 

Data for Freddie Mac since 

2008:Q3.

24. Issuers of asset-backed 

 securities (ABSs) 

 (tables F.126 and L.126) 

All data for private mortgage pools, 

consumer credit, business loans, 

student loans, consumer leases, and 

trade credit securitization through 

2008:Q4. 

None. 

25. Finance companies 

 (tables F.127 and L.127) 

All data through 2008:Q4. None. 

26. Real estate investment 

 trusts (REITs) 

 (tables F.128 and L.128) 

Data from SNL REIT DataSource 

through 2008:Q4. 

None. 

27. Security brokers and 

 dealers 

 (tables F.129 and L.129) 

Data for firms filing FOCUS and 

FOGS reports through 2008:Q4. 

None. 

28. Funding corporations 

 (tables F.130 and L.130) 

Estimates for this sector are largely residuals and are derived from data for 

other sectors. 

5