After 20 Years, Consumer Debt Looks the Same

Folks, we all know that this year's election cycle is a contentious one... But regular readers know that we've described this as a "national distraction." [Chaikin PowerFeed]( After 20 Years, Consumer Debt Looks the Same By Vic Lederman, editorial director, Chaikin Analytics Folks, we all know that this year's election cycle is a contentious one... But regular readers know that we've described this as a "[national distraction]( As we've said, the mainstream media and their advertisers want folks focused on things like their election coverage... the latest polling data... and who appears to be in the lead on any given day. And one narrative that has been making the rounds in the media is particularly insidious. I'm sure you've heard it before... Consumers are nearing a breaking point. Rapid inflation means higher prices. And household debt levels are at their highest on record. Any day now, the debt-laden American consumer is about to go bust. And the U.S. will come apart at the seams. At least, that's the story the mainstream media is pushing. But the data tells a different story... In fact, after 20 years, consumer debt still looks about the same as it always has. That includes credit-card debt, mortgage debt, and auto loans. Don't get me wrong – millions of regular folks are facing big issues in our country. Every day, many American consumers endure hardships that I wouldn't wish on anyone. But that doesn't mean the consumer overall has changed dramatically for the worse – especially over the past 20 years... Recommended Links: ["The Greatest Legal Transfer of Wealth In Human History"]( This year, a crisis could rip the financial markets in two... yet nobody sees it coming and nobody is warning you. However, Porter Stansberry says, despite the dangers ahead, this could be the greatest wealth-building opportunity of your lifetime. While millions of unprepared people will be on the losing side of this transfer... if you own the right investments, you could see significant returns. Porter tells you what to buy, [right here](. [May 1 Warning]( This 24-year market veteran's warning is already coming true. What's about to happen is worse than anything AI can do to your money. [Details here](. To look at this, let's dig into a recent report from the New York Federal Reserve's Center for Microeconomic Data. Each quarter, the New York Fed releases new household-debt data. And the report covering the end of last year included was titled: "Household Debt Reaches $17.5 Trillion in Fourth Quarter; Delinquency Rates Rise." That sounds ominous. But when we look closer at the data, we find that not much has changed over the years... The chart below shows the percentage of non-mortgage debt versus total household debt. In other words, we can see on this line that non-mortgage consumer debt, as a percentage of total debt, has varied by less than 10% in the past two decades. In fact, the percentage is about the same as back in 2003. Take a look... [Chaikin PowerFeed] In other words, we haven't seen an explosion of non-mortgage debt compared with total debt. Now, let's dig deeper into this and look at some of the components of non-mortgage debt... The next chart shows auto loans, student loans, and credit-card debt as a percentage of total household debt. This allows us to see changes inside the consumer-debt profile. And this time, the chart shows some bigger action over the years... [Chaikin PowerFeed] Over the past 20 years, student-loan debt has soared from roughly 3% of household debt to about 9%. But note that it peaked at nearly 11% in 2018. And we've seen it cool off from those levels. Auto-loan debt has also crept up as a percentage of household debt. Today, it makes up around 9%. But that's also where it was in 2003... Lastly, credit-card debt as a percentage of total household debt has fallen over the past 20 years. This should catch your attention because it runs directly counter to the current media narrative about consumer debt. Based on what the media is saying, you'd think that a major shift has taken place in consumer-debt markets. Again, the prevailing narrative is that consumers are nearing a breaking point. But when we look at the ratios behind consumer debt, we see that things overall aren't so different from two decades ago. Mortgages make up about 70% of household debt. And everything else makes up the remaining 30%. That's true even if credit-card debt, student loans, and auto loans have shifted a few percentage points over the years. In the coming days, we'll also look at total debt levels and whether consumers are keeping pace with inflation. So stay tuned. Until then, remember that the media narrative around consumer debt is simply that – a media narrative. Good investing, Vic Lederman Market View Major Indexes and Notable Sectors # Hld: Bullish Neutral Bearish Dow 30 +0.39% 6 21 3 S&P 500 +0.35% 138 300 58 Nasdaq +0.41% 22 62 16 Small Caps +0.79% 409 1074 422 Bonds +0.84% Consumer Discretionary +2.33% 9 37 7 — According to the Chaikin Power Bar, Large Cap stocks are more Bullish than Small Cap stocks. Major indexes are mixed. * * * * Sector Tracker Sector movement over the last 5 days Discretionary +5.57% Information Technology +3.32% Real Estate +1.94% Industrials +1.73% Utilities +1.61% Materials +1.37% Staples +0.9% Energy +0.84% Health Care +0.68% Financial -0.27% Communication -0.5% * * * * Industry Focus Capital Markets Services 31 31 1 Over the past 6 months, the Capital Markets subsector (KCE) has outperformed the S&P 500 by +9.60%. Its Power Bar ratio, which measures future potential, is Very Strong, with more Bullish than Bearish stocks. It is currently ranked #1 of 21 subsectors. Top Stocks [rating] PIPR Piper Sandler Compan [rating] PWP Perella Weinberg Par [rating] AMP Ameriprise Financial * * * * Top Movers Gainers [rating] TSLA +15.31% [rating] ALB +7.57% [rating] DPZ +5.62% [rating] IP +4.4% [rating] ON +4.06% Losers [rating] BEN -6.44% [rating] GOOGL -3.37% [rating] ROP -2.51% [rating] DLTR -2.41% [rating] META -2.41% * * * * Earnings Report Reporting Today Rating Before Open After Close ZBRA, TT, ETN, PYPL, HUBB, MPC, LDOS, MLM AMZN, SWKS, SMCI, EIX, RSG, PFG KO, TAP, SYY, PEG, PCAR, MMM, MCD, ADM, ITW, IT, INCY, GLW, GEHC, ECL, CNP, AMT UDR, AEP, SYK, PRU, OKE, MDLZ, LLY, INVH, FANG, ESS, CZR, CLX, BXP, AMD APD AMCR, SBUX, EXR, PSA No earnings reporting today. Earnings Surprises [rating] MSTR MicroStrategy Incorporated Q1 $5.62 Beat by $5.41 [rating] WELL Welltower Inc. Q1 $0.34 Beat by $0.13 [rating] SBAC SBA Communications Corporation Q1 $0.75 Missed by $-0.64 [rating] ACGL Arch Capital Group Ltd. Q1 $2.45 Beat by $0.36 [rating] DPZ Domino's Pizza, Inc. Q1 $3.58 Beat by $0.18 * * * * You have received this e-mail as part of your subscription to PowerFeed. If you no longer want to receive e-mails from PowerFeed, [click here](. You’re receiving this e-mail at {EMAIL}. For questions about your account or to speak with customer service, call [+1 (877) 697-6783 (U.S.)](tel:18776976783), 9 a.m. - 5 p.m. Eastern time or e-mail info@chaikinanalytics.com. Please note: The law prohibits us from giving personalized investment advice. © 2024 Chaikin Analytics, LLC. All rights reserved. Any reproduction, copying, or redistribution, in whole or in part, is prohibited without written permission from Chaikin Analytics, LLC. 201 King Of Prussia Rd., Suite 650, Radnor, PA 19087. 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