The Q1 flow of funds report from the Fed is out and the report card is in on the US consumer. Due to a rise in disposable income from Q4 (likely due to the sharp drop in gasoline prices and also tax refunds) and a drop in consumer credit (mortgage debt was flat), household debt (consumer credit + home mortgages) as a % of disposable income fell to 120% from 123% in Q4 ’08 and is at the lowest level since 2004 but remains well above the year end 2001 level of 96% and 83% range in 1995. Owners equity in their home fell to another record low to 41.4% from 42.9% in Q4. It first fell below 50% in Q4 ’07 and was 57.5% 10 years ago. Household wealth in their homes fell $448b from Q4 and is down by $4 trillion from the ’06 high. Bottom line, the data reflects the consumer deleveraging that is still ahead of us. I highlight the consumer balance sheet b/c of its huge contribution to GDP.
Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.