A record number of Americans have fallen behind on their car payments.
On Tuesday, the New York Federal Reserve released its Household Debt and Credit report covering the fourth quarter of 2018. Not only has indebtedness hit record highs, eclipsing levels seen on the eve of the Great Recession, but Americans are also having a harder time paying their bills. This is particularly apparent in the US auto market. According to the New York Fed report, more than 7 million Americans have fallen at least 90 days delinquent on their auto loans.
The national debt has pushed above the $22 trillion mark, but it’s not just Uncle Sam borrowing himself into oblivion. US household debt climbed to a record $13.54 trillion in the fourth quarter of 2018, according to a report released by the Federal Reserve Bank of New York.
Total household debt (including mortgages) now stands $869 billion higher than the previous peak of $12.68 trillion in the third quarter of 2008 (right before the crash) and 21.4% above the post-financial-crisis trough reached in the second quarter of 2013.
Consumer debt hit another record in the first half of 2018, but the rate of borrowing seems to be slowing down. Could this be a sign that the debt-based house of cards economy is close to the point of collapse?
Total consumer debt rose by $176 billion in Q2, a 4.8% year-on-year increase. That pushed total debt to a record $3.87 trillion, according to numbers released by the Federal Reserve.
Everything is great. We’re riding high. The stock market is up. Employment is up. Analysts and pundits see nothing but smooth sailing ahead.
It sounds an awful lot like 2007.
It’s like deja vu all over again.