Consumption, E-Commerce, Debt, and Delinquency

Saving the economy comes at a price

Real consumption, which is roughly 70% of the entire American economy, is now higher than prior to the pandemic:

One savior of the quarantine recession was people buying stuff on the internet:

And, that is starting to moderate as a portion of overall consumption as more people go back to shop in person:

This is good news in many ways but the pandemic rescue package came at a cost of higher debt. But, that is starting to moderate a bit as well:

And, in one of the more surprising developments, not a lot of loans blew up:

If you notice on the chart, this recession was more akin to the dot-com recession. That downturn saw only a modest bump in delinquency but came with a more severe market crash that lasted for much longer.

The fact that very few loans have gone bad gives some support to the idea that the current economic cycle in place since the 2008 downturn still hasn’t ended. Meaning, there could still be a downturn in the near future. But, that’s always the case - after all, good times are never guaranteed!

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