The U.S. Household: Connecting the Dots

On the heels of the positive surprise on the jobs front, we also received the new release of the state of U.S. households last week. The state of the U.S. household is in one the best shapes it has been in throughout history; though depending on how you look at it, it may corroborate your skepticism or optimism. At a recent discussion, a key debt figure was triggering doubt about this optimism. To ascertain if the numbers corroborate the skepticism of the U.S. consumer we wanted to offer a slideshow of the various metrics we analyze.

The first is to look at the metrics showing growing household debt to all-time levels. This is verified by the Federal Reserve in tabulating mortgages, auto loans, revolving and credit card debt as well as student loans. Currently, we are at all-time highs of just over $13 trillion. It’s up from the previous all-time high set in 2008 by about 10%.

By itself, this might cause great clickbait for articles; however, we need to look at the other side of the balance sheet. Since 2008 total household assets have risen from $69 trillion to just over $114 trillion. So, while debt increased 10%, total assets increased over 60%. Since the 1940s, assets have grown at an annual rate of 6.75%; yet from the bottom of the asset recovery in 2009, the annual growth of assets is at 5.95%. It seems we want to continually put the metrics behind the emotions of our fears on the back burner unless it affirms anxieties.