Daily Databite: Household leverage is low

People stopped borrowing and consumption didn't miss a bit. Magics

Good morning to all the readers, but especially the new ones—your mornings should be the best of all.

I’m still in Vegas, so I will be brief (and somewhat less tight), but like the mailman, I will deliver. Also, this is a Daily Databite. It’s supposed to be brief.

Daily Databite

Household leverage is low, low, low

From a debt perspective, households are in great shape. Household leverage is incredibly low:

Good news, right? The balance sheet of the Almighty Consumer is ship-shape.

The striking thing is that all that de-levering hasn’t had an impact on consumption.

Normally, if people suddenly stop borrowing, you’d expect them to stop spending, at least quite as much, but we know that that hasn’t happened. We spent plenty. It’s almost like people got huge injections of cash from some unknown source and spent that instead.