American Consumer Debt Is on the Rise


May 2017

By Selina Stoller, Summit AmeriFirst Holdings, LLC

In the United States, household debt reached a record in the first quarter of 2017, surpassing its peak from The Great Recession of 2008.

According to The Federal Reserve Bank of New York, this increase put overall household debt $50 billion above its previous peak set in the third quarter of 2008.

At 14.1 percent above the trough set in the second quarter of 2013, this happened as steady job gains, falling unemployment, and continued economic growth boosted households’ income and their willingness to borrow money.

For the first quarter of 2017, $8.62 trillion, or 68 percent, of total household debt was from mortgages. In 2008, mortgages were about 73 percent of total debt in the third quarter.

Student loan balances increased from 5 percent to 11 percent and now sits at a staggering $34 billion. This marks an increase every year for the past 18 years.

Auto loan balances continued their steady rise since 2011 while auto loan originations declined and median credit scores of borrowers for these new loans increased. Credit card balances declined as their delinquencies increased and the aggregate credit card limit increased to $15 billion for the 17th consecutive quarter.

So, what does this mean for the American economy?

Economists from the Federal Reserve Bank of New York believe that it is too early to consider these trends either economic strength or economic doom. It is important to note that performance on borrowing, especially on mortgages, has continued to improve while auto loan delinquency flows have been trending upward since 2012. Credit card transitions have also increased.

Student loans still remains an issue. Student borrowing shows delinquency that has deteriorated steadily between 2004 and 2014 and has remained incredibly high since then.

It is important to note that there was much less data available to economists during the time of The Great Recession as it pertained to household balance sheets. With better information now, it will be easier to continue to share new developments and analysis in the area of household debt.


  • 31 May, 2017
  • Josh Smith

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