Americans’ debt level notched another
record-high in the second-quarter on the back of modest rises in
mortgage, auto and credit-card-debt where delinquencies jumped.
The
media reported on Wednesday that total U.S. household debt was 12.84
trillion dollars in the three months to June, up 552 billion dollars
from a year ago, according to a Federal Reserve Bank of New York report
published on Tuesday.
The proportion of overall debt that was delinquent, at 4.8 per cent was on par with the previous quarter.
However,
a red flag was raised over the transitions of credit card balances into
delinquency which the New York Fed said “ticked up notably.”
Loosening
lending standards have allowed borrowers with lower credit scores to
access credit cards, Andrew Haughwout, an in-house economist, said in
the report.
“The current state of credit card
delinquency flows can be an early indicator of future trends and we will
closely monitor the degree to which this uptick is predictive of
further consumer distress,” he said.
Total US
indebtedness is about 14 per cent above the trough of household
deleveraging brought on by the 2007-2009 financial crises and deep
recession, a pull-back that interrupted what had been a 63-year upward
trend.
Mortgage debt was 8.69 trillion dollars in the second quarter, up 329 billion dollars from last year, the report said.
Student
loan debt was 1.34 trillion dollars, up 85 billion dollars, while auto
loan debt came in at 1.19 trillion dollars, up 55billion dollars.
(Reuters/NAN)
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