Household deleveraging has ended.
CalculatedRisk:
The economy is getting better, but it's been a really long road. Average wage increases should come in 2015, with luck... Will it be enough to get people above water? Too soon to tell...
Cheers,
Scott.
The first graph shows aggregate consumer debt increased slightly in Q3. Household debt peaked in 2008, and bottomed in Q2 2013.
The recent increase in debt suggests households (in the aggregate) deleveraging is over.
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The second graph shows the percent of debt in delinquency. The percent of delinquent debt is generally declining, although there is still a large percent of debt 90+ days delinquent (Yellow, orange and red).
The overall delinquency rate increased slightly to 6.3% in Q3, from 6.2% in Q2. However the slight increase was in the less than 30 day category, and is not a concern.
The Severely Derogatory (red) rate has fallen to 2.18%, the lowest since Q1 2008.
The 120+ days late (orange) rate has declined to 1.82%, the lowest since Q2 2008.
Short term delinquencies are back to normal levels.
The economy is getting better, but it's been a really long road. Average wage increases should come in 2015, with luck... Will it be enough to get people above water? Too soon to tell...
Cheers,
Scott.