Each quarter the New York Fed publishes estimates of total outstanding household debt and each quarter I use it to update the above graph of household debt divided by disposable personal income. The most recent quarter shows a pretty similar pace of deleveraging to the trend of the last few years (though Q1 was a partial hiatus).
The conclusions haven't really changed:
- US household deleveraging is a slow, painful, but orderly process.
- It's likely to continue for a number of years more.
- It's a drag on growth but is not going to cause the end of the world as we know it.