Consumer Debt Hits Record for Most Americans, Except the Wealthy. Consumer debt, rose to an all-time high for the 118 million US Households among the bottom 90%. Higher interest rates and inflation bolstered the total household debt to a record $16.2 Trillion last quarter according to a New York Federal Reserve report. Credit card spending posted the biggest yealry spike in more than 20 years and a warning that deliquencies are starting to rise was also noted in the report.
This means a jump by $312 billion, or 2% in total household debt. About $2 trillion higher than at the end of 2019. This jump can be attributed to increases in mortgage, auto loan, and credit card balances as high inflation is driving prices of goods and services at the highest rate in 40 years.
Delinquencies are rising modestly, particularly among low-income borrowers. Foreclosures have jumped more than 45% from the previous quarter.
Here is the number to keep in mind as you navigate through these uncertain times - 9.1%. That was the annual inflation rate in June—hitting a worse-than-expected 40-year high after an unprecedented surge in gas prices.