New data suggests that U.S. deleveraging could be more than half way through, Deutsche Bank Economist Joe LaVorgna writes today.
After peaking in the first quarter of 2009, total U.S. debt as a percentage of GDP has fallen to pre-crisis levels.
He writes:
Financial institution and household debt combined, as a percentage of GDP is now at the lowest level since Q4 2002. In short, households and financial institutions have undertaken significant balance sheet repair, which in the case of the latter sector, leaves them in a particularly more robust financial position.
See the two charts below.
