Combined consumer debt back at all-time highs heading into Christmas shopping season
After a brief respite earlier in 2017, all of a sudden consumer debt across the board has surged in the areas of student loans, auto loans, and credit card debt just weeks before retailers hope to have their biggest selling period of the year.
In fact credit card debt has soared back over the $1 trillion mark after falling below this Maginot lone during the summer, leading to a validation of a¬†recent survey that showed 78% of Americans are living paycheck to paycheck.
The latest consumer credit update from the Fed disclosed that in September, consumer credit rose by $20.8 billion, more than the $17.5 billion expected, of which $14.4 billion was non-revolving, auto and student loans, and $6.4 billion was credit card debt. Total consumer credit rose by 6.6% Y/Y, rising to $3.788 trillion as of Sept. 30.¬†This was the single biggest monthly increase since November 2016.
And speaking of student and auto loans, the Fed’s latest data showed that in the third quarter, these rose to a new all time high, of $1.112 trillion for auto loans, and a record $1.486 trillionn in student loans. The Fed also reported that nonrevolving lending to consumers by the Federal government, which is mainly student loans, rose to $1.137t, on a non-seasonally adjusted basis. –¬†Zerohedge
Reliance on consumer credit and debt to sustain their standard of living can be laid directly at the feet of both the Fed for their monetary policies that have created massive price inflation, and the government’s fiscal policies that have made both education and healthcare now unaffordable.
Even with a new administration and the perceived ‘Hope’ that showed up in the most recent Consumer Confidence Survey, Americans are just as broke and tapped out as they were just before the last financial crisis that saw millions lose their homes to foreclosure, and the economy rush headlong into a Great Recession.¬† Only now their overall debts are even larger, and so are the debts of the central bank and Federal government.
Kenneth Schortgen Jr¬†is¬†a writer for¬†The Daily Economist,¬†Secretsofthefed.com,¬†Roguemoney.net, and¬†Viral Liberty, and hosts¬†the popular¬†youtube podcast¬†on Mondays, Wednesdays and Fridays.¬†Ken can also¬†be heard Wednesday afternoons giving an weekly economic report on the¬†Angel Clark radio show.