U.S. Consumer Income & Debt Tracker

• Respondents report the monthly dollar amount earned as income or paid towards debts for each relevant category.
• Among those with a given debt or income type, responses are summarized using a trimmed mean.
• These averages are then multiplied by the share of adults with that type of income and debt, making the results representative of the total survey population, including those with and without the debt or income source.
• The resulting average dollar values are converted into an index, with total income in May 2024 set as the base value (100.0); all other income and debt values are expressed relative to this baseline.

The financial obligations ratio is calculated as total monthly debt payments divided by total monthly income, providing a summary measure of overall debt burden and financial vulnerability.

What is a trimmed mean and why do we use it?

We use a 10% trimmed mean as our representative statistic for average debt and income levels across all demographics. As with all survey data, there is some degree of noise in the data, including at times large outliers that exert undue influence if we were to calculate a simple average. We therefore calculate our “average” based on the central 80% of values to neutralize the swings associated with large outliers–i.e., a mean of the leftover data after the top and bottom 10% have been “trimmed” off. We chose this method rather than using a median because, for several less commonly used debt and income categories that are applicable to fewer than 50% of people, using the median would result in a value of 0 every month for those categories.

Why did we decide to index?

The underlying data for the consumer debt and income indexes is recorded as dollar values, so why not report dollar values? One reason for this stems from the trimming methodology: The 10% trims help reduce excess month-to-month volatility from high-end outliers. By removing some of the largest values, however, the resulting means for each category are unrealistically low compared to other datasets tracking similar concepts. Converting the dollar levels to index values eliminates this issue by removing the distraction of too-low dollar values but preserving the most critical insights afforded by this data: Changes in debt and income levels over time, the composition of debt and income types, and comparability of income sources and debt burdens across various demographics.

How did we choose the index period?

The index base value of 100.0 is equivalent to total income for all adults in May 2024, the series start date. All other values–including debt and income categories for all demographics in May 2024 and subsequent dates–are calculated relative to this base value. Since the data is not currently inflation-adjusted, most series values will likely rise in the long term as nominal incomes and debts increase. 

Why did we base our index using income for income and debt metrics?

Total income is used as the universal base value for all income and debt types to maximize the information we can glean from this dataset. We want to understand the contribution of each income component relative to total income. We also want to understand the debt-to-income ratio, so debt values are calculated relative to this total income level. Demographic differences also come into play, so all demographics’ income and debt data are calculated as relative to all adults' May 2024 total income. In this way, we preserve all the original insight made possible by collecting the original dollar values, but without the distraction of reporting actual dollar levels. 

How do we interpret the data m/m, levels/shares, etc?

The indexes in Morning Consult’s Income & Debt Tracker show how income and debt categories change over time and across groups, with all values expressed relative to total income in May 2024 (set at 100.0). Month-over-month changes in an index reflect proportional increases or decreases in the average dollar amount for that category. In contrast, index levels indicate the size of each category relative to the May 2024 baseline. In May 2024, each income and debt category level is equivalent to its percentage share of total income in that month. 

However, for subsequent months, since total income changes over time and will generally not be equivalent to 100.0, the share of income and debt relative to total debt would need to be calculated using the total income value for the corresponding month. For example, if total income was 102.0 in June 2024, this would mean income increased 2% from May 2024. If auto debt increased from 5.0 to 5.5 the same month, this would equate to a 10% increase month over month. In May 2024, the base month when total income was equivalent to 100.0, the 5.0 value of auto debt signifies that auto debt was equal to 5% of total income. In June, auto debt’s share relative to total income would now be calculated as the June auto debt index value of 5.5 divided by the June total income value of 102.0, or 5.4%.