Americans’ debt back at record high after nearly a decade (YoY Household Debt Growing Faster Than YoY Earnings G

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I was purusing through Jesse’s Cafe Americain and this story jumped out at me. “Americans’ debt back at record high after nearly a decade.”

Americans’ debt level reached a record high this year, surpassing the peak touched just as the worst of the recession was taking hold in 2008, and marking a milestone for households that now lean less on mortgages and more on auto and student loans.

Total U.S. household debt was $12.73 trillion at the end of the first quarter of 2017, up $473 billion from a year ago, according to a Federal Reserve Bank of New York survey released on Wednesday.

Total indebtedness is now 14 percent above the 2013 trough of household deleveraging brought on by the 2007-2009 financial crisis and Great Recession. The previous peak, in the third quarter of 2008, was $12.68 trillion, and the New York Fed stressed that the pull-back since then marked an “aberration” from what had been a 63-year upward trend in household debt.

Chart from the New York Fed: https://www.newyorkfed.org/medialibrary/interactives/householdcredit/data/pdf/HHDC_2017Q1.pdf

But in terms of change, student and auto loans are the leading debt products.

Here is household and nonprofit organization debt.

If we compare YoY growth in household debt compared to YoY growth since 2014, you can see that YoY earnings growth for production and non-supervisory employees (blue line) is growing at a slower rate than YoY household debt growth (red line).

I wish I had a GIF of Janet Yellen with a tea bag, but April Ludgate will do!

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