Consumers in the US are more in debt than ever 0:55
New York (CNN Business) -
American households are saddled with record amounts of debt as home and car prices soar, covid infections continue to fall, and people pull out their credit cards again.
Between July and September, US household debt rose to a new record of $ 15.24 trillion, the Federal Reserve Bank of New York reported Tuesday.
This is an increase of 1.9%, or US $ 286,000 million, compared to the second quarter of the year.
"As aid stimuli are reduced by the pandemic, we are beginning to see reversal of some of the trends in credit card balances seen during the pandemic," such as reduced spending in favor of paying balances. of debts, said Donghoon Lee, head of research at the New York Federal Reserve.
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Now that the stimulus momentum is wearing off, consumers are reverting to their old ways of spending with their credit cards.
Credit card balances increased by $ 17 billion, as in the second quarter.
But they are still $ 123 billion lower than at the end of 2019, before the pandemic.
Mortgages, which are the largest component of household debt, increased by $ 230 billion last quarter to $ 10.67 trillion.
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Auto loans and student loan balances also increased, increasing by $ 28 billion and $ 14 billion, respectively.
Although credit card debt has yet to return to its pre-pandemic level, total debt is already US $ 1.1 trillion higher than at the end of 2019.
High spending spurred by even higher inflation
Americans are spending big right now.
The economists' explanation is, for the most part, "because they can."
With the labor market recovery advancing and worker shortages driving up wages, people's portfolios are filling up before the holidays.
That's good, because everything is more expensive.
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Inflation is at multi-year highs thanks to supply chain disruptions that have increased transportation and raw material costs.
At the same time, consumer demand is also through the roof.
The latest data on inflation, published early this Tuesday, show that the prices that producers receive for their products rose 0.6% in October, adjusted for seasonal fluctuations, or 8.6% in the period. 12 months earlier.
Much of the increase was due to rising energy costs.
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Companies can only absorb a part of the price increase before having to pass it on to final consumers.
Excluding energy and food prices, as well as commercial services, the producer price index increased by 0.4% last month, seasonally adjusted, or by 6.2% if the period is considered. 12 months.
The price index that tracks intermediate demand —that is, goods and services sold to companies— for manufactured products increased by 2.1%, its biggest advance since May, driven mainly by higher energy costs. .
In the 12-month period ending in October, the index has risen 25.4%, the largest increase since January 1975.
Consumer price inflation, an indicator of the prices paid for food, housing and the like in October, will be released this Wednesday morning.
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