Americans have never been so in debt – CBS Baltimore

(CNN) – U.S. households are carrying record debt as house and car prices rise, Covid infections continue to drop, and people are pulling out their credit cards again.

Between July and September, US household debt hit a new record high of $ 15.24 trillion, the New York Federal Reserve said on Tuesday.

READ MORE: “It’s starting to look a lot like Christmas”: the magic returns to 34th Street

This is an increase of 1.9%, or $ 286 billion, from the second quarter of the year.

“As the pandemic relief efforts draw to a close, we are starting to see the reversal of some of the credit card balance trends seen during the pandemic,” such as lower spending in favor of paying off credit balances. debt, said Donghoon Lee, research fellow at the New Fed. from York.

Now that the sugar rush has worn off, consumers are reverting to their old ways of spending with their credit cards. Credit card balances increased $ 17 billion, similar to the second quarter. But they are still $ 123 billion lower than at the end of 2019 before the start of the pandemic.

Mortgages, which are the largest component of household debt, increased by $ 230 billion in the last quarter to total $ 10.67 trillion.

Auto and student loan balances also increased, increasing by $ 28 billion and $ 14 billion, respectively.

Even though credit card debt has yet to regain its pre-pandemic level, total debt is already $ 1.1 trillion higher than at the end of 2019.

High spending boosted by even higher inflation
Americans are spending big right now. The explanation of economists is, for the most part, “because they can”.

With the labor market picking up speed and labor shortages driving wages up, people’s wallets fill up before the holidays.

READ MORE: Maryland’s No.21 uses strong second half to rally against GW 71-64

This is a good thing, because everything is getting more expensive.

Inflation is reaching multi-year highs thanks to supply chain disruptions that have increased shipping and raw material costs. At the same time, consumer demand is also skyrocketing.

The latest inflation data from Tuesday morning showed the prices producers receive for their products rose 0.6% in October, seasonally adjusted, or 8.6% over the previous 12 months. Much of the increase is due to rising energy costs.

Firms can only absorb part of the price increase before passing the higher costs on to end consumers.

Excluding energy and food prices, as well as commercial services, the producer price index rose 0.4% seasonally adjusted last month, or 6.2% over the 12-month period.

The price index that tracks intermediate demand – that is, goods and services sold to businesses – for processed products jumped 2.1%, its biggest gain since May, mainly due to the rising energy costs.

During the 12-month period ended in October, the index climbed 25.4%, the largest increase since January 1975.

Consumer price inflation, which tracks prices paid for food, shelter and the like in October, is expected Wednesday morning.

NO MORE NEWS: Car overturns near Inner Harbor, video captures squeegee worker assisting driver

The-CNN-Wire
™ & © 2021 Cable News Network, Inc., a WarnerMedia Company. All rights reserved.

Source link

About Yvonne Lozier

Check Also

Benefits of e-invoicing software for law firms and lawyers

Wednesday, November 17, 2021 Running a law firm and performing administrative tasks requires a lot …

Leave a Reply

Your email address will not be published. Required fields are marked *