Chart of the Week
Weekly chart using economic data to address timely market topics from the Wells Fargo Investment Institute Global Investment Strategy team.
Craig Holke, Investment Strategy Analyst
Consumer Spending Remains Healthy
Household Debt Payments Have Fallen Along with Mortgage’s Share
“Mortgage debt levels are rising in the U.S., and that raises questions of whether increasing household debt will trigger a consumer-spending slowdown. The chart shows a declining portion of after-tax income is consumed by overall consumer debt and mortgage payments today. Debt payments have been reduced through lower interest rates for mortgage and other debt. This reduction in debt payments leaves more money in consumers’ pockets to either save or to drive economic growth through increased spending.”
What it May Mean for Investors
“While households are accumulating more mortgage debt, consumer disposable income and spending both remain healthy. We believe that these trends will support the U.S. economy, and fuel higher corporate earnings and equity prices.”
Forecasts are not guaranteed and are subject to change.
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