Flow of Funds
The Federal Reserve released new data for the first quarter of 2011. According to the report, household net worth increased by $943.4 billion in Q1 to $58.1 trillion from $57.1 trillion in Q4, 2010. The assets of households increased in the first quarter and liabilities declined somewhat. On the assets side, financial assets increased by $1.16 trillion while nonfinancial assets (primarily owner occupied real estate) declined by almost $340 billion. Liabilities declined by about $74 billion, which was mostly accounted for by a decline in the amount of home mortgage liabilities. Household net worth continues to gradually improve, but remains off by about $6.1 trillion since the start of the recession.

Consumer Credit
In April total consumer credit grew 3.1% at an annual rate, or $6.3 billion, to a total of $2.428 trillion. March’s gain was revised down to $4.8 billion (previously $6.0 billion). Revolving credit resumed its interminable decline, falling 1.4% in April after a brief uptick in March of 0.1%. Non-revolving credit increased at a 5.3% annual rate after increasing at a 3.5% pace in the previous month. Consumer demand for credit picked up a bit in April, even as consumers remain dedicated to reducing credit card debt.

International Trade Balance
The U.S. trade deficit in goods and services narrowed to -$43.7 billion in April from a downward-revised -$46.8 billion in March. Exports rose 1.3% to $175.6 billion and imports declined by 0.4% to $219.2 billion. Some of the slowdown in imports was due to a reduction from Japan, which we expect to increase again in coming months. The trade deficit in goods narrowed to -$58.1 billion and the trade surplus in services increased to $14.4 billion in April. While it’s still early in the quarter, these numbers suggest that net exports will contribute positively to economic growth in the second quarter.