On average, the U.S. consumer is in good shape

Sources: Bloomberg, Federal Reserve Board, and Wells Fargo Investment Institute. Consumer balance sheet data as of December 31, 2021. Household debt service ratio: quarterly data from January 1, 1980 to December 31, 2021. Household net worth: quarterly data from January 1, 1990 to December 31, 2021.

Key Takeaways

  • Overall, consumer finances have held up far better than they did during the Global Financial Crisis. Support has come from ample savings, gains in wealth from rising stock and home values, the lift to cash flow from mortgage refinancing, and respectable gains in earned income.
  • Overall strength among working households, particularly those with high incomes, has masked financial distress among families in lower income groups, which could increase with high inflation squeezing incomes and threatening gains in wealth.