Is Household Debt in the U.S. really a bigger problem than before the financial crisis?

There are various ways to look at Household Debt (total debt outstanding including mortgages, loans, credit cards and other debt) in the United States, we look at two today.

The first is debt servicing costs to disposable income which effectively is how much it costs to service household debt as a fraction of disposable (after tax) income. The second is household debt outstanding to disposable income which effectively is how much debt there is with respect to the same disposable (after tax) income measure.

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Delinquency and Charge-off rates across banks in the United States remain low (January 2019 edition)

We answered the question whether bad loans were really increasing for banks in the United States at the end of December. We look at Delinquency and Charge-off rates across banks for United States across different products in this post.

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Individuals now consistently contribute over 80% of all U.S. federal taxes

One big impact of the U.S. tax cut for corporations has been that corporate taxes now just contribute 8.3% of all U.S. federal taxes. As import tariffs rise, custom duties have been rising at a staggering rate, and tariffs on imported goods together with taxes levied at production now contribute 8.1% of all U.S. federal taxes. Taxes paid by individuals contribute the vast majority or 82.3% of all U.S. federal taxes.

US tax breakdown until Q3 2018

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The U.S. total wage bill to corporate profitability ratio throws up several questions

In September last year we wrote why wages weren’t rising despite record employment and labour shortages and earlier this month we wrote that U.S. Corporate profits have been growing well and have hit a record high. We explore another angle, total wages (wages including bonuses and overtime – all before taxes) to the corporate profits (before taxes) ratio.

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Rising benchmark interest rates in the United States are having little impact on mortgage and saving interest rates as well as interest margin of banks

The Federal Reserve increased the target for the bank’s benchmark rate by 0.25% (to a range of 2.25% to 2.5%) at the end of December, the ninth rate rise since 2015. Rising benchmark interest rates are having little impact on mortgage and saving rates or interest margin of banks.

Interest Margin of Banks in the United States stood at 3.33% at the end of Q3 2018, up just 0.03% from Q2 2018 (3.3%) and up just 0.18% from Q3 2017 (3.15%).

US banks net interest margin January 2019

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Healthcare has displaced Retail as the largest employer in the United States

Some 16.2 million people now work in the Healthcare sector in the United States. Healthcare has displaced Retail as the largest employer in the United States and has been the biggest job creator since the 1990s. 10.8% of all nonfarm jobs are now in healthcare. Here’s a graph of the growth of healthcare jobs,

US total healthcare payrolls 1990 to 2018   Continue reading “Healthcare has displaced Retail as the largest employer in the United States”

2019, a year that will be different

At the outset, we wish you a Happy New Year!

Today, the 3rd of January has been a record day every year (for at least the last 15 years) for several things. For starters you have online returns (in the U.S. and the U.K.), gym memberships and dating website(s) signups peaking on the day. But this year is different so expect the unexpected. We can’t write about everything today but cover four topics (Retail, Technology, Interest Rates and Debt).

2019

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Are bad loans really increasing for banks in the United States?

Just three charts hold the answer …

We wrote earlier during the year that U.S. consumer and commercial debt hit record highs but charge-off and delinquency rates remained at low levels. We will write about bad loans by each product again in the new year but meanwhile just three charts hold the answer to the question on whether bad loans are really increasing for banks in the United States.

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