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Consumer Snapshot
30 charts on the US consumer
The following is the first in a new series of themed reports DC will be publishing regularly.
The goal of these reports is to hone in on and provide a "snapshot" of a specific area of the economy/markets.
The cadence of these posts is still TBD, but it will likely be monthly.
This first report is being made available to all subscribers but future editions will require a paid subscription…
…which you can get now for 10% off (forever):
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1. Outstanding mortgages. "93% of outstanding mortgages have interest rates below the going market rate."
2. Forbearance. "0.23% of mortgage borrowers are in forbearance."
3. Foreclosures. "The share of mortgage loans in foreclosure remains very low at 0.49%."
4. Purchasing power. "Homebuyers on a $3,000 monthly budget have gained nearly $40,000 in purchasing power since mortgage rates peaked last fall."
5. Household debt (I). "Household debt outstanding as a share of US GDP is down over the past decade."
6. Household debt (II). "Eighty-nine percent of US household debt is fixed rate (mortgage, student, and auto loans) and 11% is floating rate (credit cards, HELOC, and other types of debt). As a result, the transmission mechanism of monetary policy has been weak."
7. Personal savings. "With nominal spending significantly outpacing income gains, the saving rate plunged by 0.4pp to 3.7%" in December.
8. Personal savings decomposed. "In Figure 2 the personal saving rate is decomposed into net lending and households residential investment. The most recent net lending figure (3Q23) as a share of disposable personal income stood at 4.7%, little different from the series average of 5.2%...[and] decently above the 3.5% average net lending figure for this century."
9. Deposits vs. financial assets. "The decline in bank deposits is sometimes taken as a sign that households are spending down their excess savings...or it could reflect a rebalancing for households that had temporarily swollen levels of very liquid financial assets."
10. Excess savings. "At the current monthly rundown pace, excess savings should continue to support consumer spending at least through the rest of 2024."
11. Household savings reserve (I). "This month, 30% of consumers indicated they do not have any savings, 36% have 3 months or less in savings, 19% have 4-12 months and 16% have more than a year."
12. Household savings reserve (II). "The average savings reserve has been trending lower compared to the first half of last year."
13. Sidelined cash. “Households have ~$18tn in cash.”
14. Weekly card spending. "Total card spending per HH was flat y/y in the week ending Jan 27, according to BAC aggregated credit & debit card data."
15. Consumer spending intentions (I). "Consumer spending intentions for the next month pulled back sharply following the holidays, with 27% of consumers expecting to spend more next month and 22% expecting to spend less, yielding a net of just +5% (down from an average of +15% in 2023 and vs. +15% same time last year)."
16. Consumer spending intentions (II). "Category spending intentions for the next 6 months are down across nearly all categories tested...categories with the most strongly negative net spending intentions are toys, small home appliances and consumer electronics."
17. Major purchases (I). "About half of consumers (47% vs. 51% last wave) are planning a major purchase (vehicle, large appliance, vacation, etc.) over the next 3 months."
18. Major purchases (I). "Consumers continue to be more cautious to follow through with major plans and purchases (such as the purchase of a home). Among the 15% of consumers who were considering purchasing a home, the majority (71%) are delaying or canceling those plans."
19. Major purchases (III). "After reserving judgment last fall about whether the slowdown in inflation would persist, consumers now feel assured that inflation will continue to soften."
20. Travel plans. "Over half (57% vs. 58% last wave) of consumers are planning to travel over the next six months, slightly higher vs. 56% same time last year and 53% two years ago."
21. Real consumer spending. "Real consumer spending ended the year on a strong note."
22. ECI. "Employment cost index rises 0.9% in Q4. Wages maintain strength, but benefits come in lower."
23. CB Employment Trends Index. The ETI "increased in December to 113.15, up from a downwardly revised 112.48 in November... When the Index increases, employment is likely to grow as well, and vice versa."
24. Wage growth by age cohort. "Youngest cohorts are experiencing the fastest wage growth. This is particularly important since these workers typically have the highest spending propensity."
25. Real income growth. "We expect real income growth of 3.2% in 2024 in 2024, driven by solid real wage growth and job gains; income growth should be somewhat stronger for higher-income households."
26. Top consumer concerns. "Coping with inflation continues to be the top concern for 2024, with 59% of consumers worried about rising prices, although this is down from 63% last wave and is the lowest reading since Jan‘22."
27. CB Consumer Confidence (I). Consumer confidence improved for the 3rd straight month to the highest reading since December 2021. The Present Situation Index surged to a new post-pandemic high while Expectations also improved.
28. CB Consumer Confidence (II). "Consumers’ assessment of their Family’s Current Financial Situation was more positive in January."
29. CB Consumer Confidence (III). "Consumers remained optimistic in rating their Family’s Expected Financial Situation, Six Months Hence."
30. Consumer finance dashboard. "In aggregate, consumer finance metrics remain solid by most measures."
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