America’s Shrinking Savings Buffer—and the Risk It Poses to Growth
Consumers are keeping the U.S. expansion alive. They just don’t have much of a safety net left.
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Consumers are keeping the U.S. expansion alive. They just don’t have much of a safety net left.
U.S. household debt has hit a record $18.6 trillion, but each debt category is telling a different story. Mortgage borrowers look solid, student loan delinquencies are surging, and subprime auto credit is flashing its strongest warning in decades. For anyone tracking the economy, these divergent signals matter.
U.S. holiday spending rose in 2025, according to Visa and NRF data, but inflation, discount-driven shopping, and signs of consumer stress shaped how — and where — Americans spent their money.
2025 ended with the auto-loan market quietly splitting in two: the top half of borrowers keep upgrading to $50k+ trucks and EVs at low rates, while everyone else is getting priced out, falling behind, or losing their car altogether. One stark sign: subprime delinquencies hit their worst level in over 30 years, and 1 in 4 trade-ins are now underwater by nearly $7,000. The only real bright spot is electric vehicles — leasing has become the workaround that’s keeping green sales alive.
U.S. personal income and disposable income both rose 0.4% in August 2025, while nominal spending climbed 0.6%. With prices up just 0.3%, real consumer spending advanced a solid 0.4% and the personal saving rate jumped to 4.6%. The data portray a healthy, balanced household sector: confident enough to keep spending but rebuilding buffers — textbook soft-landing dynamics.