Chart of the Week | September 27, 2021
US Household Debt Amount vs US Household Debt Percent of GDP
- US household debt had increased steadily since 2011 as the M2 money supply also increased with the pandemic showing the steepest increases.
- US household debt has surpassed 2008 levels, causing some to fear a recession is looming.
- However, even though household debt amounts have increased marginally, the US household debt percent of GDP has gradually decreased (despite a COVID-19 spike which has already started to downtrend).
- Since a high US household debt percent of GDP foreshadows recessionary concerns, the current higher debt levels do not appear to be structurally problematic in the near term since the debt’s percent of GDP has normalized into a downtrend.