The Massachusetts senator's alarm-sounding about consumer debt neglect to measure it against the growth in the economy and the ability to pay.
On the debt issue, Warren is correct in pointing out that aggregate levels have increased. Nonhousing debt has jumped from $2.63 trillion in mid-2009 as the last recession was ending to $4.02 trillion as of the end of the first quarter in 2019, an increase of 52.8%, according to New York Federal Reserve data.
Measured relative to GDP, household debt is below 80%, compared to nearly 100% at the crisis peak. As a percent of disposable income, debt now is around 9.9%, compared to 13.2% in the late-2007 peak.The charge-off and delinquency rate for all loans and leases was 1.53% in the first quarter, tied for the lowest since the second quarter of 2006, Fed data shows. True, credit card delinquencies have been inching higher, to 2.
Warren links to a Marketwatch article that calls a manufacturing recession because the sector posted declines in consecutive quarters, according to Fed data released earlier this month. But that's a suspect reading of the actual numbers that have been coming in.
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