Capacity Utilization, Allowance, Household Debt Payments, Deposits, and Money Market Funds

Money flows

The amount of manufacturing and other related capacity usage is pretty close to pre-pandemic levels, signaling a return to whatever the heck we are going to call normal from now on:

Banks, which set aside huge allowance reserves for pandemic-related losses, are starting to realize some of those losses may never materialize and are reducing that rainy-day fund, in another sign of movement toward normalization:

Households, meanwhile, have been able to lower their debt payment burden through stimulus and other good financial habits:

Another noticeable development has been the massive flow of money through various aspects of the financial system. For example, a massive outflow of large time deposits from the big banks:

Where does that money end up? Some has gone into money market funds:

And, obviously, a lot has gone into the market too (if you haven’t noticed by the rise in the S&P 500). Some of these changes have been quite drastic and lead us to a different situation than just pre-normal. So, they will also be good metrics to watch going forward to see how the recovery continues to play out.