Consumer Debt Service Ratio (DSR) & Debt Financial Obligations Ratio has been declining slightly. According to the Federal Reserve, on a seasonally adjusted basis, the FOR slightly decreased to 15.31% in 2Q/18, compared to 15.33% in 1Q/18 and 15.53% in 2Q/17. The DSR slipped down to 9.84% in the second quarter of this year, compared to 9.86% in 1Q/18, and 9.97% in 2Q/17.
The FOR peaked at 18.13% in the fourth quarter of 2007. Since peaking at 13.18% in the fourth quarter of 2007, the beginning of the Great Recession, the DSR has declined steadily since, dipping into single digits for the first time in the fourth quarter of 2012 (9.87%).
Consumer Revolving Credit
Total revolving credit for August posted at $1041.8 billion, compared to a revised $1037.0 billion in July, and a revised $1035.6 billion in June, according to the Federal Reserve. On a quarterly basis U.S. revolving consumer credit is growing by +2.9% YOY to a revised $1035.6 billion for 2Q/18, compared to a revised $1028.6 billion for 1Q/18, and $1028.5 billion for 4Q/17.
According to the Federal Reserve, revolving consumer credit outstandings (mostly credit card) stood at $1028.5 billion for end-of-year (EOY) 2017, compared to $969.4 billion for EOY 2016, and $907.9 billion for EOY 2015. At the end of the first quarter of 2018, revolving consumer credit stood at $1038.8 billion.
Debt Service Ratio
The household DSR is an estimate of the ratio of debt payments to disposable personal income. Debt payments consist of the estimated required payments on outstanding mortgage and consumer debt.
The Financial Obligations Ratio is a broader measure than the Debt Service Ratio. It includes rent payments on tenant-occupied property, auto lease payments, homeowners’ insurance, and property tax payments.
U.S. FINANCIAL OBLIGATIONS RATIO
U.S. CONSUMER DEBT SERVICE RATIO
Revolving Consumer Credit Historical
2012: $845.2 billion
2013: $855.6 billion
2014: $889.1 billion
2015: $907.9 billion
2016: $969.4 billion
2017: $1028.5 billion
2018: $1041.8 billion (as of 2Q/2018)
NOTE: All FOR/DSR Figures Revised & Updated as of 09/28/18; All Revolving Credit Revised & Updated as of 10/05/18