Households Are In Good Shape
Households Are In Good Shape
The shutdown-driven blackout in economic data means our concerns about a slowdown in the labor market remain unresolved (See September 15: The Labor Market is Slowing and September 22: Inflation of Employment? Four Charts About the Fed’s Rate Cut).
One positive in the current environment…households. If we are entering a period of labor market weakness, it will be buffered against a backdrop of low household leverage and record household net worth. For example:
- Households debt service as a percentage of disposable income remains at low levels relative to the last 30 years (Fig. 1),
- Credit card and consumer loan delinquencies have stabilized (Fig. 2), and
- Household net worth continues to grow, even for younger and lower-income families (Fig. 3).
Fig. 1: Households debt service as a percentage of disposable income
Bloomberg, Mill Creek. As of 6/30/2025.
Fig. 2: Credit card and consumer loan delinquencies have stabilized (%)
Bloomberg, Mill Creek. As of 6/30/2025.
Fig. 3: Household net worth, year-over-year growth
Bloomberg, Mill Creek. As of 6/30/2025.
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Any views expressed above represent the opinions of Mill Creek Capital Advisers ("MCCA") and are not intended as a forecast or guarantee of future results. This information is for educational purposes only. It is not intended to provide, and should not be relied upon for, particular investment advice. This publication has been prepared by MCCA. The publication is provided for information purposes only. The information contained in this publication has been obtained from sources that
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