Household debt climbed 1.1% in third quarter, Fed says
By Caroline Salas Gage Bloomberg News
NEW YORK – U.S. household debt climbed 1.1 percent during the third quarter as borrowing for mortgages, education, car purchases and on credit cards all increased, according to a Federal Reserve Bank of New York survey.
Consumer indebtedness rose $127 billion to $11.28 trillion, the biggest increase since the first quarter of 2008, according to a quarterly report on household debt and credit released today by the Fed district bank. Mortgage balances climbed $56 billion, student loans increased $33 billion, auto loans were up $31 billion and credit-card debt rose by $4 billion.
“We observed an increase of household balances across essentially all types of debt,” Donghoon Lee, senior research economist at the New York Fed, said in a statement. “With non-housing debt consistently increasing and the factors pushing down mortgage balances waning, it appears that households have crossed a turning point in the deleveraging cycle.”
Americans have slashed their debt from a peak of $12.68 trillion in the third quarter of 2008, according to the New York Fed.
Consumer sentiment in the U.S. fell in November to the lowest level in almost two years as households reeled from last month’s partial government shutdown. The Thomson Reuters/University of Michigan preliminary consumer sentiment index for this month dropped to 72, the weakest since December 2011, from 73.2 in October.
Delinquency rates continued to drop in the third quarter, with 7.4 percent of outstanding debt in “some stage of delinquency,” down from 7.6 percent in the second quarter, the New York Fed said. There were about 355,000 new bankruptcies during the period, about the same as in the comparable timeframe in 2012.
The New York Fed said the report is based on data compiled by the bank’s Consumer Credit Panel, a nationally representative random sample from Equifax Inc. credit-report data.