The Federal Reserve is talking about raising interest rates. Well, that’s going to be a big problem for American consumers who are running up debt at a torrid pace. This is yet another reason why the Fed can’t do what it’s claiming it will do.
Consumer debt jumped 11% year-on-year in November, according to the latest data released by the Federal Reserve. It was the biggest single-month jump in consumer debt in 20 years.
Pretty much everybody now expects the Federal Reserve to go to war against inflation, but the central bank has a problem not many people seem to be talking about – an economy buried under debt. In this episode of the Friday Gold Wrap podcast, host Mike Maharrey talks about consumer debt levels and their ramifications. He also discusses central bank gold-buying and breaks the November CPI data live.
American consumers piled on more debt in October as inflation continues to squeeze their pocketbooks.
Consumer debt grew by $16.9 billion, an annual increase of 4.6% (seasonally adjusted), according to the latest data released by the Federal Reserve. That raised total consumer debt to over $4.38 trillion.
American consumers piled on more debt in September as higher prices squeezed wallets.
Consumer credit grew by $29.9 billion in September, bringing the total to $4.37 trillion, according to the latest data from the Federal Reserve. The increase in consumer debt nearly doubled the consensus estimate of a $15.5 billion increase.
Consumer borrowing has slowed somewhat from the record level we saw in June, but Americans continue to pile on the debt.
Consumer debt grew by $14.4 billion in August to $4.35 trillion, according to the latest data from the Federal Reserve. That represents a 4% increase.
This follows on the heels of a 4.8% increase in July after a record 10.6% increase in June.
With the stimulus checks long ago spent, Americans have gone back to buying things the old-fashioned way – on credit.
Household debt surged by $313 billion in the second quarter to nearly $15 trillion, according to the Federal Reserve Bank of New York Household Debt and Credit Report. It was the biggest quarterly dollar increase in household debt since 2007. In percentage terms, household debt grew by 2.1%, the biggest surge since Q4 2013.
What do you do when that stimulus money runs out? You whip out the credit card.
Consumer debt was up 10% in May, according to the latest data from the Federal Reserve, and we saw a big jump in credit card balances for the first time since February 2020.
Total household debt was over $1.6 trillion higher than the previous peak in 2008 even before the full force of the coronavirus pandemic government shutdowns hit the economy.
Household debt increased by $155 billion (1.1%) in Q1 to a total of $14.3 trillion, according to the latest data released by the New York Fed. The previous peak was $12.68 trillion in the third quarter of ’08 in the early days of the financial crisis.
The solution to the coronavirus economic meltdown is to borrow our way out of it. The Federal Reserve slashed interest rates to zero and the stimulus bill makes all kinds of loan programs available to pretty much anybody and everybody. But American consumers were already up to their eyeballs in debt before the coronavirus lockdowns. In fact, consumer debt spiked again to yet another record in February, according to the latest data from the Federal Reserve.
Last week, we told you about the rising level of subprime auto loan delinquencies. Well, there is a similar thing happening in the subprime credit card market.
Is this the proverbial canary in a coal mine?
