Personal income increased 0.2% in May after increasing 0.5% in April. Current disposable personal income (DPI) also increased 0.2% in May from 0.5% in April. The real DPI, income adjusted for taxes and inflation, increased 0.1% in May after increasing 0.2% in April.
Real consumer spending (PCE) increased 0.3% in May after increasing 0.8% in April. Spending on durable goods only increased 0.6% in May compared to 2.6% in April.
Remember the GDP was adjusted three times for the first quarter of 2016 to an annual rate of 1.1%, compared to the fourth quarter of 2015 of 1.4%. (Bureau of Economic Analysis BEA)
Now that we have a picture of income and spending, here are the numbers for household debt in the first quarter of 2016:
Aggregate household debt balances increased in the first quarter of 2016. As of March 31, 2016, total household indebtedness was $12.25 trillion, a $136 billion (1.1%) increase from the fourth quarter of 2015. Overall household debt remains 3.3% below its 2008Q3 peak of $12.68 trillion.
Mortgage balances, the largest component of household debt, increased in the fourth quarter. Mortgage balances shown on consumer credit reports stood at $8.37 trillion, a $120 billion increase from the fourth quarter of 2015. Balances on home equity lines of credit (HELOC) dropped by $2 billion, to $485 billion. (Federal Reserve Bank of New York
Beware the student and auto loans.
Outstanding student loan balances increased by $29 billion, to $1.26 trillion as of March 31, 2016. 11% of aggregate student loan debt was 90+ days delinquent in the first quarter of 2016, in the last quarter of 2015, the rate was 11.5%.
Auto loans reached a balance of $1.07 trillion the first quarter of 2016. This is a $7 billion dollar increase from the last quarter. Note 3.5% of the loan balances are 90 or more days delinquent.
Credit card balances for the first quarter of 2016 declined by $21 billion, to $712 billion.
Last but not least, personal savings as a percent of DPI decreased to 5.3% in May compared to 5.4% in April. March personal savings rate was 6.0%. Notice a pattern?
Sources: Bureau of Economic Analysis (BEA), Federal Reserve Bank of New York, U.S. Census Bureau
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