Household Debt Climbed 1.1% in First Quarter, New York Fed SaysMatthew Boesler
U.S. consumer debt during the first three months of 2014 climbed for the third straight quarter as increased borrowing for homes, cars and education offset a decline in credit card balances, the New York Fed said.
Household debt advanced 1.1 percent, or $129 billion, to $11.65 trillion, marking the longest streak of consecutive quarterly increases since the third quarter of 2008, according to the New York Fed. The level of debt was $419 billion higher than a year earlier, but remains 8.1 percent below the peak of $12.68 trillion reached in the third quarter of 2008.
“We’ve observed household debt increase three quarters in a row and delinquency rates at their lowest levels since 2008,” Andy Haughwout, vice president and economist at the New York Fed, said in a statement. “The direction of future mortgage originations will have an important implication on the household financial outlook and we will continue to monitor it.”
Mortgage debt led the increase in consumer borrowing, rising $116 billion, according to the New York Fed. At the same time, mortgage originations fell by $120 billion to $332 billion, marking the lowest level of new mortgage activity since the third quarter of 2011.
Student loan debt increased by $31 billion and auto loan debt advanced by $12 billion, while credit card debt fell by $24 billion and home equity line of credit balances decreased by $3 billion.
At the start of the second quarter consumers eased off on spending at malls and restaurants as retail sales rose less than forecast in April after the strongest gain in four years.
The 0.1 percent increase followed a revised 1.5 percent surge in March that was the biggest since March 2010, Commerce Department figures showed today in Washington. The median forecast of 83 economists surveyed by Bloomberg called for a 0.4 percent advance.