Household Debt Service Ratio
Track the household debt service ratio — the share of income going to debt payments. Rising debt service crowds out consumer spending.
Current Value
Trigger Level: >13% = debt payments crowding out spending
AI Analysis
As of February 22, 2026, the Household Debt Service Ratio stands at 11.3%, which is rising and indicates that households are allocating a larger portion of their income to debt payments. This trend suggests an increasing risk of recession, as debt payments could soon begin to crowd out consumer spending if the ratio exceeds 13%.
What is the Debt Service Ratio?
The household debt service ratio measures the percentage of disposable personal income devoted to required debt payments (mortgage, consumer, and auto loans). Published quarterly by the Federal Reserve.
Why It Matters for Recession Risk
When a larger share of income goes to debt payments, less is available for discretionary spending. Debt service ratios above 13% have historically been associated with consumer stress and economic vulnerability.
Historical Context
The ratio peaked at 13.2% before the 2008 crisis and fell to historic lows of 9.2% in 2021 thanks to pandemic-era low rates and stimulus. It has been climbing as rates rose in 2022-2025.
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