Markets
In Charts: How American Household Finances are Changing
How American Household Finances are Changing
Visualizing shifts in income, savings, debt, and spending
The Chart of the Week is a weekly Visual Capitalist feature on Fridays.
Every year, Silicon Valley patiently waits for Mary Meeker from Kleiner Perkins to share her famous Internet Trends report.
The latest rendition came out two days ago. As usual, the 294-slide deck is a treasure trove of the the latest data on technology and internet trends.
But while the report is well-known as a barometer on the internet, it also features some high-level data on the U.S. economy that we found interesting. As a result, we used some of the most compelling slides to put together this week’s chart on how American household finances are changing – and we greatly thank Mary for doing the heavy lifting.
From Peak to Peak
In 2007, real median household income had a local peak of $58,149, and then fell off a cliff at the same time as the credit cycle, which reached its own peak in 2008 Q3 as the financial crisis set in.
Real median household income bottomed in 2012, and then debt followed in 2013.
Looking at the most recent year of data available, both categories are now back above pre-crisis highs. Real median household income has now surpassed its all-time record in 1999 – and total household debt has topped $13 trillion in 2018 Q1, more than $500 billion higher than its previous peak in 2008.
A Closer Look
While consumer debt is similar in terms of total size from a decade ago, the composition has changed considerably.
Mortgage debt, which makes up the vast majority of consumer debt, is still actually down from its 2008 peak by 4%. Replacing that is other forms of debt, including student loans:
Non-Housing Debt | 2008 Q3 ($T) | 2018 Q1 ($T) | Change |
---|---|---|---|
Credit Card | $0.86 | $0.81 | -6% |
Auto Loan | $0.81 | $1.23 | 52% |
Student Debt | $0.61 | $1.41 | 131% |
Other Non-Housing Debt | $0.41 | $0.39 | -5% |
Note: it appears the data listed in this table is one quarter more recent than Meeker’s, which was represented in chart
Since 2008, student loan debt has surged by 131% – and auto loans by 52%. Mortgage debt, credit debt, and other non-housing debt have not yet crawled back to pre-crisis peaks.
Saving and Spending
Looking at the longer-term trend, Americans are borrowing more and saving fewer dollars.
In the 1970s, both rates were about the same as a percentage of income, falling in a range between 13-15%. Today, the savings rate is below 5%, and debt-to-annual income ratio has risen to 22%, according to Meeker.
What are American households spending money on?
Category | 1972 | 1990 | 2017 |
---|---|---|---|
Shelter | 12% | 15% | 17% |
Taxes | 15% | 9% | 15% |
Transportation | 14% | 16% | 14% |
Food | 15% | 15% | 12% |
Household Operations | 11% | 12% | 11% |
Pensions & Insurance | 7% | 8% | 10% |
Healthcare | 5% | 5% | 7% |
Entertainment | 6% | 5% | 4% |
Apparel | 5% | 5% | 3% |
Other | 9% | 9% | 8% |
Notably, households are spending more on shelter and healthcare – meanwhile, the cost for food, entertainment, and apparel are decreasing over time.
Markets
Will Tesla Lose Its Spot in the Magnificent Seven?
We visualize the recent performance of the Magnificent Seven stocks, uncovering a clear divergence between the group’s top and bottom names.
Will Tesla Lose Its Spot in the Magnificent Seven?
This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.
In this graphic, we visualize the year-to-date (YTD) performance of the “Magnificent Seven”, a leading group of U.S. tech stocks that gained prominence in 2023 as the replacement of FAANG stocks.
All figures are as of March 12, 2024, and are listed in the table below.
Rank | Company | YTD Change (%) |
---|---|---|
1 | Nvidia | 90.8 |
2 | Meta | 44.3 |
3 | Amazon | 16.9 |
4 | Microsoft | 12 |
5 | 0.2 | |
6 | Apple | -6.7 |
7 | Tesla | -28.5 |
From these numbers, we can see a clear divergence in performance across the group.
Nvidia and Meta Lead
Nvidia is the main hero of this show, setting new all-time highs seemingly every week. The chipmaker is currently the world’s third most valuable company, with a valuation of around $2.2 trillion. This puts it very close to Apple, which is currently valued at $2.7 trillion.
The second best performer of the Magnificent Seven has been Meta, which recently re-entered the trillion dollar club after falling out of favor in 2022. The company saw a massive one-day gain of $197 billion on Feb 2, 2024.
Apple and Tesla in the Red
Tesla has lost over a quarter of its value YTD as EV hype continues to fizzle out. Other pure play EV stocks like Rivian and Lucid are also down significantly in 2024.
Meanwhile, Apple shares have struggled due to weakening demand for its products in China, as well as the company’s lack of progress in the artificial intelligence (AI) space.
Investors may have also been disappointed to hear that Apple’s electric car project, which started a decade ago, has been scrapped.
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