Total U.S. household debt is now $993 billion higher than the peak of $12.68 trillion in the third quarter of 2008, according to a new report by the New York Fed.
According to the Fed’s Quarterly Report on Household Debt and Credit[1], household debt increased for the 19th consecutive quarter to $13.67 trillion and was “boosted by increases in mortgage, auto and student loan balances,” the report explained.
Serious delinquencies — payments that are late by 90 days or more — are also on the rise, driven by credit cards and student loans.
Auto loan delinquencies, which millennials struggle with[2], also rose slightly.
Deutsche Bank’s Torsten Slok said in a previous interview said that an increase in delinquency rates increases the likelihood[3] of recession.
But not all economists agreed with the prognosis.
“We are not yet seeing signs of an inflection point in consumer credit cycle in the issuer performance data,” Fitch Ratings Senior Director, Non-Bank Financial Institutions Michael Taiano told Yahoo Finance. “What we are seeing reflects the seasoning of a resumption of consumer debt growth over the past few years after a period of stagnation following the financial crisis.”
Furthermore, added Taiano, “we anticipated some worsening in credit performance this year relative to last year when there were a number of macroeconomic tailwinds including the tax cuts. So it’s not that surprising to see some credit...