In a piece from Business Insider, we read:

US households today have a savings rate of just 3.7% — way below the historical levels of 9%. Meanwhile, consumer spending exploded by \$208 billion in the fourth quarter of 2023. A recent New York Fed report showed that households added a whopping $212 billion to their debt load over that same time period. That means over 100% of that increase in consumer spending was financed with debt, Rosenberg said. (emphasis mine)

It immediately strike me as simply wrong (or misleading at best). Indeed, the figure of 212B of increased debt includes 110B increase in mortgage debt - which clearly not part of "consumer spending".

I am looking for a series that would give us the share of consumer spending that is debt financed, but so far could not find any. In theory we can create one as in the article (but this time substract mortgage debt), but I'm unsure this is a very good approach. As far as I could tell those two figures are from different sources (BEA and NY Fed) so they might not correspond very well in terms of methodology (For example I think personal consumption is seasonally adj while the debt numbers are not)


1 Answer 1


Please correct me if I'm wrong. I think your observation is really interesting, so I decided to dig for some data.

I think this is the NY Fed Report on Household Debt and Credit that the article was referring to. Indeed, the total debt outstanding increased by \$212B. The detail and historical records of the data can be found here. I also found that US consumer spending increased by \$235B actually, according to the BEA's seasonally adjusted data (Table 2.4.5.). As far as I know, mortgage payment does not count as consumption (which can be optimized by consumers) but rather a form of bill - a fixed payment that affects your disposable income.

I am looking for a series that would give us the share of consumer spending that is debt financed, but so far could not find any.

There are some surveys on consumption behavior that include payment choices (either by credit (debt-financed) or cash/debit). The one I know is the Survey and Diary of Consumer Payment Choice by Fed Atlanta. The survey is very detailed. The series you want to look at is probably "All Payments by Type of Consumer Expenditure and Payment Instruments." The survey has been conducted annually since 2012.

I have attached some screenshots from the data report which can give you a sneak peek of the relevant information.

Share of payment

enter image description here

  • $\begingroup$ Thank for your answer. I'm not sure though that paying with credit card (rather than physical cash) will amount as credit debt... need to read the definitions. $\endgroup$
    – discipulus
    Commented Apr 12 at 20:21

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