(The Center Square) – The median household debt-to-income ratio in Minnesota during the second quarter of 2020 stood at 1.41 to 1.51, which is below the national average of 1.51, the Federal Reserve System reported recently.
During the second quarter of 2019, the debt-to-income ratio for Minnesota was between 1.33 and 1.41.
The Fed sees such state household debt-to-income ratios as key to explaining the sluggish economic recovery in many regions in the wake of the Great Recession more than a decade ago. States or counties with high household debt relative to income endured drops in consumer spending and employment as the recession unfolded, the Fed reported.
In the Fed data, household debt numbers come from both Equifax and the Federal Reserve Bank of New York’s Consumer Credit Panel. The estimates of household income come from the U.S. Bureau of Labor Statistics.
A household’s debt-to-income ratio is defined as monthly debt payments divided by gross monthly income.
Q2 2020 Debt-to-Income Ratios by State
| State | Debt-to-Income Ratio Low (Q2 2020) | Debt-to-Income Ratio High (Q2 2020) | Debt-to-Income Ratio Low (Q2 2019) | Debt-to-Income Ratio High (Q2 2019) |
| Alabama | 1.51 | 1.62 | 1.41 | 1.51 |
| Alaska | 1.62 | 1.75 | 1.62 | 1.75 |
| Arizona | 1.75 | 1.89 | 1.75 | 1.89 |
| Arkansas | 1.33 | 1.41 | 1.24 | 1.33 |
| California | 1.75 | 1.89 | 1.75 | 1.89 |
| Colorado | 1.89 | 2.13 | 1.75 | 1.89 |
| Connecticut | 1.51 | 1.62 | 1.41 | 1.51 |
| Delaware | 1.75 | 1.89 | 1.51 | 1.62 |
| District of Columbia | 0.39 | 1.09 | 0.39 | 1.09 |
| Florida | 1.89 | 2.13 | 1.75 | 1.89 |
| Georgia | 1.62 | 1.75 | 1.51 | 1.62 |
| Hawaii | 2.13 | — | 2.13 | — |
| Idaho | 1.89 | 2.13 | 1.89 | 2.13 |
| Illinois | 1.33 | 1.41 | 1.24 | 1.33 |
| Indiana | 1.41 | 1.51 | 1.24 | 1.33 |
| Iowa | 1.24 | 1.33 | 1.09 | 1.24 |
| Kansas | 1.09 | 1.24 | 1.09 | 1.24 |
| Kentucky | 1.24 | 1.33 | 1.09 | 1.24 |
| Louisiana | 1.51 | 1.62 | 1.41 | 1.51 |
| Maine | 1.75 | 1.89 | 1.62 | 1.75 |
| Maryland | 1.89 | 2.13 | 1.89 | 2.13 |
| Massachusetts | 1.33 | 1.41 | 1.24 | 1.33 |
| Michigan | 1.41 | 1.51 | 1.24 | 1.33 |
| Minnesota | 1.41 | 1.51 | 1.33 | 1.41 |
| Mississippi | 1.51 | 1.62 | 1.41 | 1.51 |
| Missouri | 1.33 | 1.41 | 1.24 | 1.33 |
| Montana | 1.89 | 2.13 | 1.75 | 1.89 |
| Nebraska | 1.24 | 1.33 | 1.09 | 1.24 |
| Nevada | 2.13 | — | 1.75 | 1.89 |
| New Hampshire | 1.75 | 1.89 | 1.62 | 1.75 |
| New Jersey | 1.62 | 1.75 | 1.51 | 1.62 |
| New Mexico | 1.62 | 1.75 | 1.51 | 1.62 |
| New York | 1.09 | 1.24 | 0.39 | 1.09 |
| North Carolina | 1.62 | 1.75 | 1.51 | 1.62 |
| North Dakota | 1.09 | 1.24 | 0.39 | 1.09 |
| Ohio | 1.24 | 1.33 | 1.09 | 1.24 |
| Oklahoma | 1.24 | 1.33 | 1.24 | 1.33 |
| Oregon | 1.75 | 1.89 | 1.62 | 1.75 |
| Pennsylvania | 1.33 | 1.41 | 1.24 | 1.33 |
| Rhode Island | 1.75 | 1.89 | 1.51 | 1.62 |
| South Carolina | 1.89 | 2.13 | 1.75 | 1.89 |
| South Dakota | 1.33 | 1.41 | 1.24 | 1.33 |
| Tennessee | 1.51 | 1.62 | 1.33 | 1.41 |
| Texas | 1.33 | 1.41 | 1.09 | 1.24 |
| Utah | 1.75 | 1.89 | 1.75 | 1.89 |
| Vermont | 1.51 | 1.62 | 1.41 | 1.51 |
| Virginia | 1.89 | 2.13 | 1.89 | 2.13 |
| Washington | 1.62 | 1.75 | 1.62 | 1.75 |
| West Virginia | 1.41 | 1.51 | 1.24 | 1.33 |
| Wisconsin | 1.24 | 1.33 | 1.24 | 1.33 |
| Wyoming | 1.62 | 1.75 | 1.51 | 1.62 |
Source: Federal Reserve System
