U.S. Financial Accounts Again Show Decreased Borrowing and Decreased Net Wealth in Q3
Summary
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Q3 borrowing decreases in all major sectors.
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Households had largest credit demand of any sector – even the federal government
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Household net worth and U.S. total net wealth also fell, but by more modest amounts.
Borrowing in the U.S. economy was $4.882 trillion in Q3 2022, down from $6.071 trillion in Q2, both cited at seasonally adjusted annual rates. Q3’s borrowing represented 19.0% of GDP, down from 24.0% in Q2 and 33.5% in Q1. The revision to the Q2 borrowing raised it from the 23.5% of GDP reported in the September release, while Q1 was revised just slightly from 33.1% of GDP.
Borrowing decreased moderately in all major economic sectors. Total nonfinancial business had the largest decrease, as that sector borrowed $1,040 trillion in Q3, down from $1.480 in Q2. Nonfinancial corporations borrowed $667 billion in Q3, down from $981 billion in Q2. Within that sector, commercial paper issuance was $152 billion in Q3, down from the record amount in Q2 of $269 billion. There was a bit of corporate bond issuance in Q3, $12 billion, following the net paydown of $192 billion in Q2. Corporations borrowed $513 billion in loans, down from $893 billion in Q2. Noncorporate businesses borrowed $373 billion in Q3, down from $500 billion in Q2.
The federal government borrowed $1.101 trillion in Q3, noticeably less than the $1.443 trillion in Q2.
Households borrowed $1.162 trillion in Q3, down from $1.342 trillion in Q2. The Q3 amount was 6.3% of disposable income. One-to-four family home mortgage borrowing was $805 billion, somewhat less than the $1.027 trillion in Q2. Consumer credit rose $322 billion, less than the $392 billion in Q2.
Domestic financial institutions borrowed $1.254 in Q3, following $1.369 trillion in Q2 trillion in Q2. The Q3 amount consisted of $971 billion in debt securities and $283 billion in loans.
Foreign borrowers, both private and governmental institutions, borrowed $344 billion in Q3, slightly less than the $385 billion in Q2.
Net wealth in the U.S. economy decreased $120 billion in Q3, thus showing basically no change after falling $5.943 trillion in Q2, not seasonally adjusted or annualized. Household net worth fell $392 billion in Q3 after plunging $6.293 trillion in Q2.
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); these 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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