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http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B1E78F574%2D16D7%2D46AE%2D8D23%2DEC479D355E02%7D&dist=newsfinder&symbol=&siteid=mktwWASHINGTON (MarketWatch) -- U.S. households took on debt at the fastest pace in 20 years in 2005, fueled by a housing boom that boosted their net worth to a record $52.1 trillion, the Federal Reserve said Thursday.
The Fed's quarterly flow of funds report shows the explosion of debt in the U.S. economy continued in 2005, with net savings in the economy falling below 1% of gross domestic product for the first time on record.
Led by a surge in mortgage borrowing, U.S. households' debt increased 11.7% to record $11.5 trillion in 2005, the fastest growth since 1985, the Fed said. Read the full report.
Total financial debt in the U.S. economy grew 9.5% to a record $26.4 trillion in 2005, the biggest increase since 1986, the Fed said. Corporate borrowing increased 7.8% to $8.4 trillion, the biggest increase since 2000.
Federal government borrowing increased 7% in 2005, the slowest growth since a four-year run of net debt paybacks ended in 2001.
Net worth of households growing at slower pace
The net worth of U.S. households -- assets minus liabilities -- increased 8% to a record $52.1 trillion at the end of 2005. It was the slowest growth in net worth since a 4% decline in 2002.
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