Household debt grows at fastest pace in six years


Household debt rose by $241B, or 2.1%, in Q4 to $11.52T, a NY Fed report shows, with the increase the highest since Q3 2007 - just before the great recession started.

On year, debt climbed by $180B, the first year-on-year rise since late 2008, although the figure is still 9% below its peak of $12.7T in Q3 2008.

In the last quarter, mortgages rose by $16B on year to $8.05T following four consecutive years of declines. Other household debt includes credit cards, and auto and student loans.

The growth in debt can be explained by the improving economy and job market, and banks relaxing the lending rules.

Retail analyst David Strasser is skeptical about what the figures mean. "The problem is you're not seeing job growth; you're not seeing wage growth," Strasser says. "We're still over-leveraged by any historical measure."

Comments (4)
  • The_Hammer
    , contributor
    Comments (5093) | Send Message
     
    Not seeing job growth. LOL. when did affordability and a job stop a credit binge?

     

    This has been the game plan for the last several decades.
    19 Feb 2014, 07:18 AM Reply Like
  • mitrado
    , contributor
    Comments (2033) | Send Message
     
    Looks like the motto is: "If the government can keep piling up debt, why can't we?"
    19 Feb 2014, 07:37 AM Reply Like
  • outofhere
    , contributor
    Comments (3694) | Send Message
     
    mitrado

     

    I agree unfortunately many of my fellow baby boomers are finding out that the joke of the 70's that if you borrow now you pay later is not a joke.
    24 Feb 2014, 11:35 AM Reply Like
  • DeepValueLover
    , contributor
    Comments (11221) | Send Message
     
    Household debt growing while job growth and wages are stagnant?

     

    Recipe for disaster.
    19 Feb 2014, 08:13 AM Reply Like
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