US consumer incomes and credit card debt

Many market commentators talk about the struggling US consumer, with rising costs forcing them to take on expensive debt, but this is not borne out by the data.

Real disposable personal income per capita (blue below) reached $50.4K in March, compared to the pre-pandemic peak of $48K in Feb 2020. The subsequent spike in 2020-21 was caused by a massive rise in government transfers (red) which have now almost completely subsided.

Real Disposable Personal Income Per Capita & Government Transfers

Average per capita income could conceal a skewed distribution towards high income-earners but median incomes don’t show this. Real median personal income fell from $41K in 2019 to $40.4K in 2020, recovering to $40.5K in 2022. Unfortunately that is the latest available data, but there is no sign of a reversal in the long-term up-trend, with the recent dip minor relative to most past recessions.

Real Median Personal Income

Consumer loans for credit cards and other revolving debt have climbed steeply relative to disposable personal income, reaching 5.06% in March 2024 (blue below). But the sharp fall in 2020-21 was the result of a spike in government transfers (red) and the ratio is no higher than pre-pandemic levels of 5.08% to 5.15% in 2019.

Credit Card Debt/Disposable Personal Income & Government Transfers/Disposable Personal Income


Government stimulus helped to soften the fall in incomes during the pandemic and assisted the post-pandemic recovery. Real per capita disposable income is at an all-time high outside of the pandemic stimulus in 2020-21 and real median personal income displays a strong up-trend. Credit cards and revolving consumer debt are also no higher than pre-pandemic levels relative to disposable personal income.

We feel that many commentators are too focused on the negatives and fail to recognize the robust performance of the American consumer.