Before turning to that in more detail, I would like to briefly review the challenges facing U.S. households, both for their direct impact on Canada and for the insights they offer for financial stability. U.S. household sector For a generation, U.S. households increasingly “saved” through capital appreciation rather than from current income.
Over the last three decades, U.S. consumer spending grew substantially faster than national income, driving the ratio of consumption to GDP from 62 per cent to a record 70 per cent (Chart 2).