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US Household Debt Increases

Q4 2022 data reveals increased borrowing led by credit card debt

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  • Written by  Banking Exchange staff
US Household Debt Increases

US total household debt increased 2.4% to $16.9trn in the fourth quarter of 2022, according to The Federal Reserve Bank of New York.

The Quarterly Report on Household Debt and Credit revealed that balances stand at $2.75trn higher than at the end of 2019, in the last report before the pandemic recession.

The nationally representative Consumer Credit Panel data revealed non-housing balances grew by $126bn. An increase in credit card debt made up almost half of this rise with a $61bn increase in the fourth quarter to $986bn, relative to a pre-pandemic high of $927bn.

Auto loan balances increased more modestly by $28bn, which the Fed noted was consistent with the upward trajectory seen since 2011, and student loan balances increased $21bn.

Wilbert van der Klaauw, economic research advisor at the New York Fed, said: "Credit card balances grew robustly in the 4th quarter, while mortgage and auto loan balances grew at a more moderate pace, reflecting activity consistent with pre-pandemic levels."

Debt delinquency rate increased again for the quarter for nearly all debt types, continuing the trend away from historically low rates during the pandemic. The delinquency rate for credit cards increased by 0.6% and the rate for auto loans increased by 0.4%.

"Although historically low unemployment has kept consumer's financial footing generally strong, stubbornly high prices and climbing interest rates may be testing some borrowers' ability to repay their debts," said van der Klaauw.

The New York Fed noted in a separate post that delinquency rates increased faster among younger borrowers.

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