Consumer finances are somewhere between 'strong' and 'normal' 💰

As saving rates fall and debt delinquencies rise, real wages have risen and net worth has improved 🤑

Photo by Braňo on Unsplash

The strength of consumer finances has been one of the most important economic stories of the past three years.

Despite weak sentiment and high inflation, government stimulus and persistent job creation made for a lot of spending power in the economy. And consumers spent.

Lately, excess savings are largely depleted, interest rates are a bit higher, and debt delinquency rates are off their historic lows.

However, this does not mean the consumer is toast.

While a number of financial consumer metrics may have deteriorated in recent months, they are not signaling trouble. They’ve mostly “normalized” from unusually strong levels. It’s in line with the broader narrative of an economy that’s gone from very hot to pretty good.