In an alarming sign of the current state of the economy, a new report has revealed just how tightly everyday Americans are being squeezed.
The New York Federal Reserve’s quarterly report on household debt and credit, released this month, found that “aggregate household debt balances increased by $148 billion in the first quarter of 2023.” That amounts to a 0.9 percent rise from the fourth quarter of 2022.
While that quarter-to-quarter bump is notable, the big-picture outlook is just as grim.
According to the report, the total outstanding balance for Americans currently sits at $17.05 trillion. That whopping figure is a $2.9 trillion increase from the tail end of 2019.
The timing of that spike is notable because it’s right before the COVID-19 pandemic hit en masse. The government response to the pandemic, including the shuttering of swathes of businesses, undoubtedly played a role in the increase.
The New York Federal Reserve highlighted a number of bleak figures regarding the debt afflicting average Americans.
The only total balance that did not go up in the first quarter was credit card balance. That total remained flat at $986 billion.
However, the report noted that remaining flat in this instance isn’t a good thing. Typically, credit card balances decline in the first quarter.
Other balances skyrocketed.
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Mortgage balances shown on consumer credit reports increased by $121 billion, standing at $12.04 trillion by the end of March.
Home equity lines of credit increased by $3 billion, the fourth straight quarter in which that figure went up. This recent surge follows a 13-year decline in those particular lines of credit. The total outstanding balance is $339 billion.
Auto loan balances went up by $10 billion in the first quarter. That has been trending up since 2011.
Other debt balances, such as retail-specific cards and other consumer loans (for instance, getting a credit card for specific use at an auto repair shop), went up by $5 billion.
The ever-divisive student loan balance is at $1.6 trillion, a $9 billion bump from last quarter.
Alarmingly, 102,000 consumer credit reports had bankruptcy added to their first quarter reports. It’s only a slight bump from the last quarter, but it also marks the first time that figure has exceeded 100,000 since 2021.
This report comes at a poor time for President Joe Biden, as it illustrates that the economy is not in good shape as the president seeks re-election in 2024.