Income Growth Outpaces Household Borrowing

Andrew Haughwout, Donghoon Lee, Daniel Mangrum, Joelle Scally and Wilbert van der Klaauw

No 20241113, Liberty Street Economics from Federal Reserve Bank of New York

Abstract: U.S. household debt balances grew by $147 billion (0.8 percent) over the third quarter, according to the latest Quarterly Report on Household Debt and Credit from the New York Fed’s Center for Microeconomic Data. Balances on all loan products recorded moderate increases, led by mortgages (up $75 billion), credit cards (up $24 billion), and auto loans (up $18 billion). Meanwhile, delinquency rates have also risen over the past two years, returning to roughly pre-pandemic levels (and exceeding them in the case of credit cards and auto loans), though there are some signs of stabilization this quarter. Are rising aggregate debt burdens sustainable? Or is this expansion to be expected given increases in aggregate income and population size? In this post, we take a look at debt balances scaled by income, tracking the evolution of this ratio over the past twenty-five years.

Keywords: household; finance (search for similar items in EconPapers)
JEL-codes: G5 (search for similar items in EconPapers)
Date: 2024-11-13
New Economics Papers: this item is included in nep-ban
Note: The Quarterly Report and this analysis are based on the New York Fed Consumer Credit Panel (CCP), drawn from Equifax credit reports.
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