Growth is slowing and so is debt creation:
The UK economy has been receiving a number of plaudits for its economic growth. Initial estimates for growth in the first quarter came in at 0.8%, or 3.2% annualised. But there are growing concerns over debt, the housing market, real wage growth and income inequality and weakness in fixed capital investment and a tail off in export led growth.
Much of recent growth has been ascribed to an increase in consumer debt and housing market activity, and we can see that there has been a notable increase in secured lending:
This is the third perspective dealing with concerns over US employment and related US growth dynamics:
A great deal of the growth in employment over the last few decades has been concentrated in the health and education sectors. Student debt has become a major problem post the onset of the current financial crisis and health care has likewise become, over time, a tremendous economic cost and a structural barrier to growth.
Financial sector debt (and as noted consumer debt) has fallen significantly since the crisis:
Yet, if we look at the financial sector assets with respect to non financial sector credit market debt, we start to see an interesting picture:
If you look at debt service ratios (Fed data), they are close to historical lows:
But what if we adjust for low real earnings growth and lower savings rates (source data BEA)?
Recent commentary from a number of sources suggests that the US balance sheet recession is over.
Perhaps if you just look at the context of the last decade, then yes, consumer debt has fallen back from the build up that immediately preceded the crisis:
I keep reading blog posts and newspaper articles that state that, you know, debt in the post war years was higher than it is now and therefore high levels of government debt are not a problem.
We know the main PMI index weakened in April and the two most recent regional PMIs also disappointed (Phil Fed/NY Empire State) and March industrial/manufacturing output confirmed a weaker manufacturing picture. The most recent NFIB report, while showing improvement, was still decidedly gloomy.