Credit Card Debt Soars in America




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POSTED BY Ed (13 days ago)
Consumer debt – or euphemistically, consumer “credit” – jumped 4.9% in the third quarter compared to the third quarter last year, or by $182 billion, to almost, but no cigar, $4 trillion, or more precisely $3.93 trillion (not seasonally adjusted), according to the Federal Reserve this afternoon. As befits the stalwart American consumers, it was the highest ever.

Consumer debt includes credit-card debt, auto loans, and student loans, but does not include mortgage-related debt:

https://wolfstreet.com/wp-content/uploads/2018/11/US-consumer-credit-total-2018-Q3.png

The nearly $4 trillion in consumer debt is up 49% from the prior peak at the cusp of the Financial Crisis in Q2 2008 (not adjusted for inflation).

Over the same period, nominal GDP (not adjusted for inflation) is up 39% — thus continuing the time-honored trend of debt rising faster than nominal GDP.

But a hot economy is helping out: While over the past 12 months, consumer debt jumped by 4.9%, nominal GDP jumped by 5.5%. A similar phenomenon also occurred in Q2. This is rather rare. The last time nominal GDP outgrew consumer credit, and the only time since the Great Recession, was in the three quarters from Q1 through Q3 2015.

More https://wolfstreet.com/2018/11/07/the-state-of-the-american-debt-slaves-q3-2018/


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