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Income Growth Softens Q2 Household Debt Burden

CANADA DATA
  • Closely watched ratio of household debt to disposable income fell to 180.5% from 184.2% in Q1, moving away from record high 184.7% in Q3 2022.
  • Disposable income +2.6%, outpacing debt growth.
  • Slower borrowing driven by mortgage demand at lowest since 2005 amid BOC rate hikes. Governor Macklem may take report as another sign monetary policy working to cool economy.
  • Mortgage interest payments +5.0% after four consecutive quarters of double-digit increases. Mortgage principal payments -1.1%.
  • Some 14.8% of disposable income went to debt repayment compared with 14.9% in Q1.
  • Savings rate increased to 5.1%, still running high compared with pre-pandemic levels.
  • Consumer debt remains elevated at about 103% of GDP.

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