• Investing
  • Stock
Round Table Thoughts
  • Economy
  • Editor’s Pick
Home Economy Consumer Debt Growth is Accelerating
Economy

Consumer Debt Growth is Accelerating

by December 9, 2022
by December 9, 2022 0 comment
Share
0
FacebookTwitterPinterestWhatsapp

Total consumer credit outstanding rose by $27.1 billion to $4,729.3 billion in October, a 0.6 percent increase from the prior month. From a year ago, total consumer credit is up 8.1 percent, the fastest pace since November 2011 (see first chart).

Within the total, revolving credit, primarily credit cards, added $10.1 billion (see top of second chart) to $1,171.2 billion, a 0.9 percent gain for the month and a 15.0 percent rise over the past year. Nonrevolving credit added $17.0 billion (see top of second chart) to come in at $3,558.2 billion, a 0.5 percent gain for the month and a 6.0 percent gain from a year ago. Revolving credit made up 24.8 percent of total consumer credit while nonrevolving accounted for 75.2 percent.

Nonrevolving credit has been growing rapidly over the past decade and a half, driven primarily by student loans and motor vehicle loans. As of the end of the third quarter, student loans totaled $1,768.8 billion, or 49.7 percent of nonrevolving credit, and auto loans totaled $1,397.0 billion, or 39.2 percent of nonrevolving debt. Together, they account for 88.9 percent of nonrevolving debt outstanding and 67.3 percent of total consumer credit.

Despite the rise in consumer debt, two key measures suggest that household balance sheets are generally healthy. As of the second quarter, the financial obligations ratio (monthly payments for financial obligations as a share of disposable personal income) was 14.27 percent, up from 14.24 percent in the prior quarter. Like many economic statistics, these numbers have been heavily distorted by the pandemic, lockdowns, and government payments. Excluding the government transfer payments, financial obligations would be 18.1 percent, unchanged from the prior quarter. Both measures remain well below their 40-year average through the end of 2019 (see third chart).

Household debt service (a narrower measure that includes just minimum monthly debt payments) came in at 9.58 percent for the second quarter, up from 9.52 percent. Excluding the government transfer payments, debt service comes in at 12.14 percent. Both of these measures are also well below their 40-year average (see third chart).

Total consumer credit rose again in October on gains in revolving credit and nonrevolving credit. Growth has been accelerating and when combined with rising interest rates, may push financial burdens up from the current low levels. Any significant decline in the labor market and personal incomes will only exacerbate the trend.

You Might Also Like
  • DeSantis to join Fox News for Iowa town hall hours after giving major address in Florida
  • Former VP contenders Rubio, Burgum in running for Trump admin secretary of state: report
  • Rick Scott demands answers on NIH funding that went to Wuhan Institute of Virology
  • Furious Republicans accuse Biden of caving to anti-Israel protesters as ‘Squad’ Dems claim victory on Rafah
Share
0
FacebookTwitterPinterestWhatsapp

previous post
Consumer Sentiment Improved in Early December but Remains Weak
next post
Lululemon stock is down 13% today: buy the dip?

You may also like

WATCH: Israel finds weapons, military equipment used by Hamas in...

November 16, 2023

New poll reveals how well voters know the candidates on...

August 2, 2024

Lawmakers ask Biden to add Office of National Drug Control...

February 3, 2023

‘Unmitigated s—show’: House Republicans fume over speaker vacancy amid Israel...

October 9, 2023

Joe Wilson shares why he invited Judge Merchan to Trump...

June 5, 2024

JD Vance campaigns in Philly on Day 1 of the...

August 19, 2024

Wisconsin lawmaker says his bar not a ‘bad establishment’ after...

May 26, 2023

YouTube censors another RFK Jr interview; Kennedy says platform protecting...

June 29, 2023

Rick Scott’s advice to McCarthy on the debt ceiling talks:...

May 5, 2023

NYC city mayor’s claims of carrying photo of fallen officer...

July 7, 2023

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Breakouts, Momentum & Moving Averages: 10 Must-See Stock Charts Right Now

      May 31, 2025
    • Leadership Rotation Could Confirm Corrective Phase

      May 30, 2025
    • Run Your Stock Portfolio Like a Pro Sports Team

      May 30, 2025
    • U.S. foreign tax bill sends jitters across Wall Street

      May 30, 2025
    • Amazon taps Xbox co-founder to lead new team developing ‘breakthrough’ consumer products

      May 30, 2025

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be...

      June 27, 2024 2,765 views
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as...

      August 9, 2024 2,472 views
    • 3

      Biden appointee played key role in recruiting Chinese...

      June 25, 2024 2,451 views
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful...

      July 10, 2024 2,432 views
    • 5

      Harris VP pick spent years promoting research facility...

      August 29, 2024 2,308 views

    Categories

    • Economy (7,009)
    • Editor's Pick (2,106)
    • Investing (538)
    • Stock (2,581)

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be revived under new House GOP bill

      June 27, 2024
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as Harris camp blasts ‘lying’ critics

      August 9, 2024
    • 3

      Biden appointee played key role in recruiting Chinese businesses to Delaware: ‘Longtime friends’

      June 25, 2024
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful of Chinese spy threats

      July 10, 2024
    • 5

      Harris VP pick spent years promoting research facility that collaborated with ‘Chinese military company’

      August 29, 2024

    Latest News

    • Breakouts, Momentum & Moving Averages: 10 Must-See Stock Charts Right...

      May 31, 2025
    • Leadership Rotation Could Confirm Corrective Phase

      May 30, 2025
    • Run Your Stock Portfolio Like a Pro Sports Team

      May 30, 2025

    Categories

    • Economy (7,009)
    • Editor's Pick (2,106)
    • Investing (538)
    • Stock (2,581)

    Disclaimer: RoundTableThoughts.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2024 RoundTableThoughts.com. All Rights Reserved.

    Round Table Thoughts
    • Investing
    • Stock
    Round Table Thoughts
    • Economy
    • Editor’s Pick

    Read alsox

    Dem gubernatorial candidate took money from...

    August 11, 2023

    Trump rejects idea Secret Service couldn’t...

    July 17, 2023

    Hunter Biden deposed in Arkansas child...

    June 17, 2023
    Sign In

    Keep me signed in until I sign out

    Forgot your password?

    Password Recovery

    A new password will be emailed to you.

    Have received a new password? Login here