(Or rather borrowing--and the difference is important...)
According to the latest Quarterly Report on Household Debt and Credit report from the Federal Reserve Bank of New York's Center for Microeconomic Data, in Q4 2022 credit card balances increased by $61 BN to $986 BN, above the pre-pandemic high of $927 BN. They had declined to $770 BN in Q1 2021.
Also, in Q4 2022, mortgage balances rose to $11.92 TN, auto loan balances to $1.55 TN, and student loan balances to $1.60 TN. Auto loan balances have been steadily increasing for the past decade, notwithstanding the reductions seen across other balances post-COVID.
The share of current debt transitioning into delinquency increased for nearly all debt types to above pre-COVID averages. This is seen across all cohorts, but is especially noticeable for the 20 to 40s cohorts, who have lower incomes and much lower wealth, all else equal.
Total household debt rose by $394 BN, or 2.4%, to $16.90 TN in the fourth quarter of 2022. Non-housing balances grew by $126 BN all told.
We have often noted that debt accumulation is stimulative, but debt saturation certainly isn't. And with the contraction in lending previously noted, this fuel for the consumer spending portion of the US economy will have to slow.
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