Research summary

Quantifying the health of the U.S. consumer

October 18, 2021

Credit metrics tell the story

Figure 1: Credit card write-offs trended lower even as unemployment spiked during the pandemic
The figure shows the credit card charge-off rate and the U-3 unemployment rate from January 2000 through July 2021. Both of those metrics showed a spike during the global financial crisis. The unemployment rate showed an even greater spike during the COVID-19 pandemic. On the other hand, the credit card charge-off rate showed a decline toward the end of 2020 that continued into 2021.

Consumers across the income spectrum are faring well

Figure 2: Consumers at all income levels are adding to their savings
The figure shows the year-over-year change in cash equivalents for low-, medium-, and high-income earners from the first quarter of 2000 through the first quarter of 2021. The percentage of change for all three income groups varied over the period. During the global financial crisis, the percentage rose for high-income earners but fell for medium- and low-income earners. During the pandemic, however, the percentage rose for all three income categories.

The upshot of a strong U.S. consumer

Active Fixed Income at Vanguard
The figure shows the active fixed income numbers for taxable and municiple bond
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