U.S. Household Debt Climbs
The flow of funds report published today by the Federal Reserve Bank shows that U.S. household debt increased at an annual rate of 1.2%, the largest increase since the first quarter of 2008. Non-financial sector debt rose by a seasonally…
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For the first time in more than two years, state and local government debt also rose, by 0.8% in the second quarter. Federal debt rose by 10.9% in the quarter, the smallest increase since the second quarter of last year.
Total borrowing by U.S. households rose by $157.3 billion in the second quarter, only the second of the last 17 quarters to show an increase. Total U.S. household debt is just a shade under $13 trillion.
Consumer credit rose by 6.2% as student and auto loans once again jumped. And the falling value of equities reduced net worth by $322 billion. The recent rise in the equities markets have likely turned that figure around since the end of the second quarter. Real estate values rose by $355 billion in the second quarter, leading to a total household net worth of $62.7 trillion.
The added borrowing in the second quarter could be either a sign that Americans are more confident about their future prospects or a sign that household cash is in short supply. The Fed doesn’t answer that question.
The flow of funds report is available here.
Paul Ausick
Contact [email protected] for any questions or corrections.
Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.
He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.
