Economic Snapshot: Household Debt Service Payments as a Percentage of Disposable Personal Income

Second Quarter 2008

(Percent change at an annual rate from the preceding period.)

Q3-07 Q4-07 Q1-08 Q2-08
Growth Rate-Real Gross Domestic Product 4.8% -0.2% 0.9% 1.9%
Inflation Rate-Consumer Price Index 2.8% 5.0% 4.3% 5.0%
Civilian Unemployment Rate 4.7% 4.8% 4.9% 5.3%

* Advance estimate


What is the household debt service ratio?

The household debt service ratio (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.

What is disposable personal income?

In the United States, personal income includes all income received by U.S. residents in a given year from all sources. Personal income is the sum of wage and salary payments, other labor income, rental income, dividend and interest income, and transfer payments to individuals, such as welfare and unemployment insurance. Disposable personal income is the amount of personal income that remains after personal taxes are subtracted. It is the amount of personal income available to people for spending and saving.

Approximately what percent of disposable personal income were household financial obligations in 1980?

In 1980, household financial obligations represented slightly more than 11 percent of disposable personal income.

What is the trend for household financial obligations as a percent of disposable personal income since 1995?

Since 1995, household financial obligations as a percent of disposable personal income have been increasing.


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