Borrowing in U.S. Markets Up Slightly in Q2
Summary
- Q2 credit demand was 14.7% of GDP, somewhat larger than Q1’s 14.0%.
- Federal government continues as largest borrowing sector.
- Household and businesses each borrowed about $600 billion in Q2.
Borrowing in the U.S. economy totaled $4.2 trillion seasonally adjusted annual rate in Q2, equal to 14.7% of GDP (measured in current dollars). This is moderately larger than the $3.9 trillion in Q1, which was 14.0% of GDP. The Q1 borrowing was revised from $4.1 trillion reported back in June, which was 14.4% of GDP. All of the quarterly dollar amounts shown here are seasonally adjusted annual rates, and revisions to prior quarters are frequent in this dataset. The Federal Reserve released the Q2 data on September 12, 2024.
As usual, the federal government had by far the largest amount of borrowing, $1.89 trillion, marginally more than the $1.83 trillion in Q1. The Q2 federal government borrowing was 6.6% of GDP, up very slightly from 6.5% in Q1; both of these were much smaller than in 2023, which averaged $2.62 trillion, equal to 9.6% of GDP.
Borrowing by the private sectors of the economy was quite similar among them in Q2. Corporate nonfinancial businesses borrowed $625 billion in Q2, down slightly from $689 billion in Q1; both of these are substantially more than the total for 2023 of $245 billion. The Q2 amount consisted of debt securities of $279 billion, down from $541 billion in Q1, and loans of $346 billion, noticeably more than the $148 billion in Q1.
Households and nonprofit institutions borrowed $632 billion in Q2, up from $549 billion in Q1. The Q2 amount included $398 billion in 1-4 family home mortgages, up from $251 billion in Q1, and $83 billion in consumer credit in Q2, slightly less than the $96 billion in Q1.
State and local governments borrowed $196 billion in Q2, basically double the Q1 amount of $100 billion.
Financial institutions’ credit needs, which can vary noticeably from period to period, were $69 billion in Q2, down from $422 billion in Q1 and a total for all of 2023 of $355 billion. The Q2 amount was just 0.2% of GDP and 1.5% in Q1, while back in 2022, the annual total was 6.2% of GDP.
Foreign sector borrowing was $627 billion in Q2, up from $213 billion in Q1 and the largest quarterly amount since Q3 2021. For all of 2023, foreigners borrowed just $164 billion in U.S. markets.
For the whole U.S. economy, net wealth was $153 trillion at the end of Q2, up from $150 trillion at the end of Q1 and $144 trillion at the end of 2023. The Q2 amount was up 7.0% from a year ago. Household and nonprofits net worth was $164 trillion at the end of Q2, up from $161 trillion at the end of Q1 and $155 trillion at the end of 2023. These net wealth and net worth amounts are not seasonally adjusted.
The Financial Accounts data are in Haver's FFUNDS database. The Federal Reserve is the main source, while associated information is compiled in the Integrated Macroeconomic Accounts produced jointly with the Bureau of Economic Analysis (BEA); those nonfinancial data are carried in Haver's USNA database as well as in FFUNDS. Note that revisions are common throughout the accounts with every quarterly release.
Carol Stone, CBE
AuthorMore in Author Profile »Carol Stone, CBE came to Haver Analytics in 2003 following more than 35 years as a financial market economist at major Wall Street financial institutions, most especially Merrill Lynch and Nomura Securities. She has broad experience in analysis and forecasting of flow-of-funds accounts, the federal budget and Federal Reserve operations. At Nomura Securites, among other duties, she developed various indicator forecasting tools and edited a daily global publication produced in London and New York for readers in Tokyo. At Haver Analytics, Carol is a member of the Research Department, aiding database managers with research and documentation efforts, as well as posting commentary on select economic reports. In addition, she conducts Ways-of-the-World, a blog on economic issues for an Episcopal-Church-affiliated website, The Geranium Farm. During her career, Carol served as an officer of the Money Marketeers and the Downtown Economists Club. She has a PhD from NYU's Stern School of Business. She lives in Brooklyn, New York, and has a weekend home on Long Island.
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