Recession watch: US household balance sheet appears healthy

As the saying goes – as the US consumer goes, so goes the US economy. Luckily, US household balance sheets appear to be in good shape.^* “With household leverage at near record lows and corporate balance sheets solid, those initial conditions are simply too strong for a deep and protracted balance sheet recession to take hold. Instead, a milder income statement recession appears to be a more likely outcome if we do slip into recession,” said Garrett Melson, CFA^®, Portfolio Strategist, Natixis Investment Managers Solutions.

Household balance sheet  3/31/05 - 12/31/24

• Household debt reflects home mortgages and lines of credit, as well as consumer credit, including credit cards and auto loans.

• Household balance sheets appear to be better than pre-pandemic levels.^* 

• Household net worth in the US is at all-time highs, along with cash and cash-like securities.^*