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Liberty Street Economics
135 posts on "Household Finance"May 07, 2020
Amid the COVID-19 Outbreak, Consumers Temper Spending Outlook
The New York Fed’s Center for Microeconomic Data released results today from its April 2020 SCE Household Spending Survey, which provides information on consumers' experiences and expectations regarding household spending. These data have been collected every four months since December 2014 as part of our Survey of Consumer Expectations (SCE). Given the ongoing COVID-19 outbreak, the April survey, which was fielded between April 2 and 30, unsurprisingly shows a number of sharp changes in consumers’ spending behavior and outlook, which we review in this post.
Continue reading "Amid the COVID-19 Outbreak, Consumers Temper Spending Outlook" »
Posted by Blog Author at 11:00 AM in Expectations, Household Finance, Pandemic | Permalink | Comments (0)May 05, 2020
U.S. Consumer Debt Payments and Credit Buffers on the Eve of COVID-19
Today, the New York Fed’s Center for Microeconomic Data released the Quarterly Report on Household Debt and Credit for 2020:Q1. Because consumer debt servicing statements are typically furnished to credit bureaus only once during every statement period, our snapshot of consumer credit reports as of March 31, 2020 is, in effect, largely a pre‑COVID‑19 view of the consumer balance sheet. While significant indications of the pandemic are yet to appear in our Consumer Credit Panel (CCP—the data source for the Quarterly Report, based on anonymized Equifax credit reports), we are able to observe the credit position of the American consumer just as the pandemic and associated lockdowns struck the United States.
Continue reading "U.S. Consumer Debt Payments and Credit Buffers on the Eve of COVID-19" »
April 16, 2020
How Widespread Is the Impact of the COVID-19 Outbreak on Consumer Expectations?
In a recent blog post, we showed that consumer expectations worsened sharply through March, as the COVID-19 epidemic spread and affected a growing part of the U.S. population. In this post, we document how much of this deterioration can be directly attributed to the coronavirus outbreak. We then explore how the effect of the outbreak has varied over time and across demographic groups.
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Posted by Blog Author at 11:00 AM in Expectations, Household, Household Finance, Labor Economics, Pandemic | Permalink | Comments (0)April 06, 2020
Coronavirus Outbreak Sends Consumer Expectations Plummeting
The New York Fed’s Center for Microeconomic Data released results today from its March 2020 Survey of Consumer Expectations (SCE), which provides information on consumers' economic expectations and behavior. In particular, the survey covers respondents’ views on how income, spending, inflation, credit access, and housing and labor market conditions will evolve over time. The March survey, which was fielded between March 2 and 31, records a substantial deterioration in financial and economic expectations, including sharp declines in household income and spending growth expectations. As shown in the first two columns of the table below, the median expected year-ahead growth in income and spending declined from 2.7 percent and 3.1 percent in February to 2.1 percent and 2.3 percent in March, respectively. Similarly, expectations about home price growth plunged from 3.1 percent in February to 1.3 percent in March. The March reading for one-year home price growth expectations came in about 1.4 percentage points below the previous low for the series, which stretches back to June 2013.
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Posted by Blog Author at 11:00 AM in Expectations, Household, Household Finance, Pandemic | Permalink | Comments (0)February 26, 2020
Did Subprime Borrowers Drive the Housing Boom?
Editor’s note: When this post was first published, the chart labels for “Non-Boom Counties” were incorrect; the labels have been corrected. (February 26, 12:00 pm)
The role of subprime mortgage lending in the U.S. housing boom of the 2000s is hotly debated in academic literature. One prevailing narrative ascribes the unprecedented home price growth during the mid-2000s to an expansion in mortgage lending to subprime borrowers. This post, based on our recent working paper, “Villains or Scapegoats? The Role of Subprime Borrowers in Driving the U.S. Housing Boom,” presents evidence that is inconsistent with conventional wisdom. In particular, we show that the housing boom and the subprime boom occurred in different places.
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Posted by Blog Author at 7:00 AM in Banks, Central Bank, Credit, Crisis, Economic History, Financial Institutions, Financial Markets, Household, Household Finance, Housing, Mortgages, Recession | Permalink | Comments (8)February 11, 2020
Charging into Adulthood: Credit Cards and Young Consumers
The New York Fed’s Center for Microeconomic Data today released the Quarterly Report on Household Debt and Credit for the fourth quarter of 2019. Total household debt balances grew by $193 billion in the fourth quarter, marking a $601 billion increase in household debt balances in 2019, the largest annual gain since 2007. The main driver was a $433 billion annual upswing in mortgage balances, also the largest since 2007. Auto loan and credit card balances both increased by a brisk $57 billion last year, while student loan balances climbed by a more muted $51 billion, well below the $114 billion increase recorded in 2013—the fastest pace of growth for the series. The source for the Quarterly Report is the New York Fed’s Consumer Credit Panel—a panel data set that now spans twenty-one years, 1999-2019. The unique panel design allows us to identify new entrants to the credit market: as young people age into having credit reports and using credit products, they are “born” into the panel, enabling us to observe the credit behavior of young borrowers.
Continue reading "Charging into Adulthood: Credit Cards and Young Consumers" »
December 13, 2019
Tariffs, Auto Loans, Rising College Costs, and Other Top LSE Posts of 2019
With each new Liberty Street Economics post, we aim to build familiarity with New York Fed research and policy analysis, and to share the expertise of our staff when it is relevant to the issues of the day. More than sixty economists contribute, and we tap coauthors from other central banks and academia as well, so the topics vary widely, covering the alphabet of “JEL Codes” in the economics literature plus numerous policy themes. Judging from our internet traffic, we have a core group that checks in to read nearly everything. Some posts break out to a wider public, prompted by news articles that cite our findings and even a mention in a presidential candidate’s tweet. Take a look at our top five most-read posts of 2019.
Continue reading "Tariffs, Auto Loans, Rising College Costs, and Other Top LSE Posts of 2019" »
Posted by Blog Author at 7:00 AM in Credit, Household Finance, Student Loans, Tariffs | Permalink | Comments (1)November 13, 2019
Just Released: Racial Disparities in Student Loan Outcomes
Total household debt balances increased by $92 billion in the third quarter of 2019, according to the latest Quarterly Report on Household Debt and Credit from the New York Fed’s Center for Microeconomic Data. The balance increase reflected nearly across the board gains in various types of debt, with the largest gains of $31 billion in mortgage balances (0.3 percent) and $20 billion in student loan balances (1.4 percent). The Quarterly Report, and the following analysis, are both based on the New York Fed’s Consumer Credit Panel, which is itself based on anonymized Equifax credit report data. Our report also provides breakouts by age, and by state, demonstrating that patterns of borrowing and repayment are heterogeneous by those factors. But there are many other dimensions across which we see varying credit market outcomes.
Continue reading "Just Released: Racial Disparities in Student Loan Outcomes" »
October 17, 2019
Just Released: Introducing the SCE Public Policy Survey
Today, we are releasing new data on individuals’ expectations for future changes in a wide range of public policies. These data have been collected every four months since November 2015 as part of our Survey of Consumer Expectations (SCE). The goal of this post is to introduce the SCE Public Policy Survey and highlight some of its features.
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Posted by Blog Author at 10:59 AM in Expectations, Household Finance, Wages | Permalink | Comments (0)October 10, 2019
Is Free College the Solution to Student Debt Woes? Studying the Heterogeneous Impacts of Merit Aid Programs
The rising cost of a college education has become an important topic of discussion among both policymakers and practitioners. At least eleven states have recently introduced programs to make public two-year education tuition free, including New York, which is rolling out its Excelsior Scholarship to provide tuition-free four-year college education to low-income students across the SUNY and CUNY systems. Prior to these new initiatives, New York, had already instituted merit scholarship programs that subsidize the cost of college conditional on academic performance and in-state attendance. Given the rising cost of college and the increased prevalence of tuition-subsidy programs, it’s important for us to understand the effects of such programs on students, and whether these effects vary by income and race. While a rich body of work has studied the effects of merit scholarship programs on educational attainment, the same is not true for the effects on financial outcomes of students, such as debt and repayment. This blog post reports preliminary findings from ongoing work, which is one of the first research initiatives to understand such effects.
Posted by Blog Author at 7:00 AM in Education, Household Finance, Human Capital, Inequality | Permalink | Comments (0)About the BlogLiberty Street Economics features insight and analysis from New York Fed economists working at the intersection of research and policy. Launched in 2011, the blog takes its name from the Bank’s headquarters at 33 Liberty Street in Manhattan’s Financial District.
The editors are Michael Fleming, Andrew Haughwout, Thomas Klitgaard, and Asani Sarkar, all economists in the Bank’s Research Group.
Liberty Street Economics does not publish new posts during the blackout periods surrounding Federal Open Market Committee meetings.
The views expressed are those of the authors, and do not necessarily reflect the position of the New York Fed or the Federal Reserve System.
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