Bloomberg reports U.S. Business Debt Exceeds Households' for First Time Since 1991.

With the record-long expansion in its 11th year, Fed policy makers have indicated in recent months that they’re watching the corporate debt situation closely. Chairman Jerome Powell said in October that “leverage among corporations and other forms of business, private businesses, is historically high. We’ve been monitoring it carefully and taking appropriate steps.”

Hello Fed, I have a Question

Uh.. Pardon me for asking, but could you please explain the "appropriate steps" that you have taken?

Thank You.

Financial Accounts of the US

With that pertinent question out of the way let's take another dive into the details of the Fed's Z1 report on the Financial Accounts of the United States.

Seven Key Details

  1. ​The net worth of households and nonprofits rose to $113.8 trillion during the third quarter of 2019.
  2. Domestic nonfinancial debt outstanding was $53.9 trillion at the end of the third quarter of 2019, of which household debt was $16.0 trillion, nonfinancial business debt was $16.0 trillion, and total government debt was $21.9 trillion.
  3. Domestic nonfinancial debt expanded 6.3 percent at an annual rate in the third quarter of 2019, up from an annual rate of 3.1 percent in the previous quarter.
  4. Household debt increased 3.3 percent at an annual rate in the third quarter of 2019. Consumer credit grew at an annual rate of 5.1 percent, while mortgage debt (excluding charge-offs) grew at an annual rate of 2.7 percent.
  5. Nonfinancial business debt rose at an annual rate of 5.7 percent in the third quarter of 2019, up from a 4.4 percent annual rate in the previous quarter.
  6. Federal government debt increased 10.4 percent at an annual rate in the third quarter of 2019, up from a 2.1 percent annual rate in the previous quarter.
  7. State and local government debt expanded at an annual rate of 0.5 percent in the third quarter of 2019, after contracting at an annual rate of 2.5 percent in the previous quarter.

​I picked up that lead chart idea from Sven Henrich.

RECOMMENDED ARTICLES

Here are a few Tweets to consider.

Fed Balance Sheet

Credit Card Defaults

Corporate Profits

Bond Buying

Everything is Fine

Where?

Everywhere.

The Fed clearly has everything under control.

Please consider Fed Brainwashing on Net Wealth in One Picture.

Mike "Mish" Shedlock

Fed Brainwashing on Net Wealth in One Picture

The Fed released its "Z1" report today on Household Net Worth and Domestic Nonfinancial Debt. Let's dive in on wealth.

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Household Debt Hits Record High $13.29 Trillion Led by Mortgages, Student Loans

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Deleveraging? Not Quite: Household Debt Quarterly Report

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Household Debt Up 18 Consecutive Quarters to a New Record, Card Stress Rising

Household debt is up 18 consecutive quarters to a new record high. Credit card stress is on the rise in most age groups.

Debt and Deleveraging: Did the U.S. Overcome the Debt Crisis?

Citing the latest report on “Debt and Deleveraging” by the McKinsey Global Institute

Tweets of the Day: Apple, Venezuela, Foxconn, Corporate Debt Bomb, Trump

Here are a few tweets from some Twitter profiles that I follow. Various topics.

Student Loan Debt Climbs to Record High $1.4 Trillion in 2019

Want to know what's holding back housing and family formation? Look no further than student loans.

Household Debt Reaches New Peak: A Very Deflationary Setup

Aggregate household debt balances rose by $116 billion in the third quarter of 2017. As of September 30, 2017, total household indebtedness was $12.96 trillion. This increase put overall household debt $280 billion above its 2008 Q3 peak, and 16.2 percent above the 2013 Q2 trough.