U.S. Household Debt Exceeds $14 Trillion for the First Time

[ffr]

Source: Yahoo

Americans increased their borrowing for the 22nd straight quarter as more households took out loans to buy homes or refinance existing mortgages, according to a report released today from the Federal Reserve Bank of New York.
<snip>

Total debt for people ages 18 to 29 rose to a record $1.04 trillion.

Student debt increased to $1.51 trillion from $1.46 trillion at the end of 2018. More than $100 billion in student debt is held by those age 60 and over. Auto loans rose to $1.33 trillion, while credit card debt rose to a record $930 billion.
<snip>

Almost 5% of auto loans are 90 days of more delinquent. This is the highest percentage since the third quarter of 2011.

Credit card delinquencies rose to 8.36% an 18-month high.

Read more: https://finance.yahoo.com/news/u-household-debt-exceeds-14-160303784.html

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Meanwhile total U.S. debt as a percentage of GDP rose to 5.1% last year, the highest it's been since the end of the Republican Great Recession, up 34% from the previous year, which was up from the year before that. All under Republican fiscal policy, supposedly advertised fiscal conservative policy. NOT!

U.S. Deficit Soaring. Why?
https://www.democraticunderground.com/100212977780

[guillaumeb]

1. But the US media regularly speaks of the booming economy.

The reality is that, after 40 plus years of age stagnation, accumulating debt is how many people live their lives. And they hope to one day earn enough to pay off the debt.

[NCjack]

2. Only $14 Trillion? Come on America, we can dig a little deeper

and find the cash in our pockets to pay for Trump's next tax reduction for the super rich.

[progree]

6. Here's some more: the federal government's debt, $23.256 Trillion

http://www.treasurydirect.gov/NP/BPDLogin?application=np

[EarthFirst]

3. There's two economies being run simultaneously in this nation...

One where relatively few are doing really well; and one where the majority of us are doing poorly.

The headlines that overall economy is booming is bullshit.

We’re barely above board; and the budget proposal only aims to further reduce the social safety nets that protect those who are going to need it most...

[handmade34]

5. well, the "economy" is doing well

it's just everyday people that aren't

[SergeStorms]

4. The Trump economy at work.

for those here who are old enough, does this remind you of any other republican president's economy?

Shades of Ronald Reagan as far as I'm concerned. There's much more interference keeping interest rates low this time, though. It will all explode when the next Democratic President takes office. Count on it.

[progree]

7. Wages are finally rising as the labor market tightens further - MSM meme

Uh, err, not quite.

Real (meaning inflation-adjusted) average weekly earnings of production and non-supervisory workers:
http://data.bls.gov/timeseries/CES0500000031

Obama last 3 years: +4.48%, Trump's first 35 months: +2.84%, Last 12 months: +0.31%

I'm using Trump's first 35 months instead of 36 months because the January CPI report won't be released until February 13. I'll then be able then to do Trump's 36 months and last 12 months through January 31. But anyway, this is how it is shaping up.

What's odd is that pretty much ever since Trump has been president, the media has been talking about the tightening labor market and wages finally rising. Well, the figures show a wage slowdown compared to Obama's last 3 years.

Here's the hourly version for those who prefer that:

Real (meaning inflation-adjusted) average hourly earnings of production and non-supervisory workers:
http://data.bls.gov/timeseries/CES0500000032

The nominal dollar, aka current aka greenbacks version (raw, not adjusted for inflation, but seasonally adjusted)
weekly: http://data.bls.gov/timeseries/CES0500000030
hourly: http://data.bls.gov/timeseries/CES0500000008

[Warpy]

8. The hilarious part is that Republicans expect all this debt to be paid off

by people whose wages might be rising in dollar amounts but whose purchasing power has been falling year over year for decades.

[progree]

10. "but whose purchasing power has been falling year over year for decades."

Do you have any links to that data? As far as an average or median? Thanks

[Warpy]

11. Yes, I live to do research for people

https://finance.yahoo.com/news/eroding-purchasing-power-minimum-wage-010607940.html

https://www.visualcapitalist.com/buying-power-us-dollar-century/

https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us-workers-real-wages-have-barely-budged-for-decades/

https://www.cnbc.com/2017/06/23/how-much-housing-prices-have-risen-since-1940.html

https://www.healthsystemtracker.org/chart-collection/how-have-healthcare-prices-grown-in-the-u-s-over-time/#item-start

I'm not going to bother with the CPI inflation rate that excludes housing and health care. Those are the costs that are eroding the purchasing power the most, along with service on mounting debt incurred to compensate for falling purchasing power.

[progree]

12. Where did you get that CPI excludes healthcare?

And for housing, they use rents and rental equivalents, that over time are about the same as housing costs. Especially considering far lower mortgage rates far below the averages of the 70's and beyond. And the average house size is like 63% larger than it was in 1973, while average household size has been dropping throughout history.

https://www.bls.gov/news.release/cpi.nr0.htm

https://www.newhomesource.com/learn/how-much-square-footage-fits-your-family/
The average size of new homes built in the United States grew 62 percent from 1,660 square feet in 1973 to 2,687 square feet in 2015, an increase of 1,027 square feet, according to the U.S. Census Bureau.

Average household size (1960 and after)
https://www.statista.com/statistics/183648/average-size-of-households-in-the-us/
In 1973 it was 3.01, in 2019: 2.52

[Warpy]

14. Before the double digit interest rates late in the 70s

mortgage rates were in the single digits and housing prices even in eastern Mass. were low five figures for something small and livable. Prices there have gone up by a factor of ten while interest rates have been halved. Do the math. That is one area I am familiar with. Sure, you can get some real bargains in Detroit and rural Mississippi, but that's not where the jobs are and that's why wages have been so severely eroded by housing costs. Rents in areas where the jobs are have followed those costs.

Health care costs aren't just the insurance bite, they're also increasing copays, exclusions, and deductibles that reset every year. It also covers a lot of drugs that used to be prescription and covered but are now OTC and not covered.

The CPI is a one size fits all average that lost its relevance a long time ago, which is why I don't use it.

[progree]

15. Health care in the CPI is more than just the insurance premium

Still not getting where CPI does not consider housing costs.

You might have missed what I added in my last post (which I edited moments before your post) -- the average house size has increased 63% since 1973 while the average household size has declined from 3.01 to 2.52.

"The CPI is a one size fits all average that lost its relevance a long time ago, which is why I don't use it."

So what do you use, anecdotal stuff?

[progree]

16. Interest rates are less than half of what they were in mid 70's

"Before the double digit interest rates late in the 70s mortgage rates were in the single digits and housing prices even in eastern Mass. were low five figures for something small and livable. Prices there have gone up by a factor of ten while interest rates have been halved. Do the math."

Why don't you help me out with this. And compare the result to the actual rise in median or average wages since then. (And not just the minimum wage). And factoring in the 60% increase in average house size

Interest rates have been halved? They've been more than halved,

http://www.freddiemac.com/pmms/pmms30.html
For example:

Dec 1973: 8.54% 1.0 points

Dec 1974: 9.62%, 1.3 points (well before the great inflation where they peaked in 1982 at 16.04% average for the year, plus 2.2 points)

Dec 2019: 3.72%, 0.7 points

I bought my house in June 1980, and I sure don't remember that as being some kind of nirvana.

"even in eastern Mass. ... Sure, you can get some real bargains in Detroit and rural Mississippi, "

Could we talk about a national average rather than some of the highest and lowest places?

[progree]

13. Pew research -- "have barely budged for decades" --

Not exactly the same as "fallen decade after decade", now, is it?

Your link from post #11 --
    https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us-workers-real-wages-have-barely-budged-for-decades/

They've climbed quite a bit since August 2018, enough to pass the previous 1973 peak (finally).

So yeah, they've fallen decade after decade since 1973, but they've also risen decade after decade after a 1995 low.

Yes, its pathetic that only recently have we passed the 1973 peak in that measure (while all the productivity and real GDP gains have gone to the top few percent). But still that's quite different from "fallen decade after decade".

[progree]

17. "along with service on mounting debt incurred to compensate for falling purchasing power."

As for the mounting debt ... a lot of that is upgraded lifestyle:

I don't remember almost everyone in the 1970's having a home computer plus a mobile phone plus a mobile computer (their smartphone).

Nor having TV with 500 channels. Back in the 1970's my choices were ABC, NBC, CBS, and "education TV", a far cry from PBS today.

Nor were more than half the cars SUVs and 4-door pickup trucks in the 1970s.

I already mentioned the 60% increase in average house size with 16% lower average household size.

[raccoon]

18. Thank you for posting about average house size. Most of the time people leave it out

when comparing now to "back in the day."

[llmart]

9. Thanks, Trump.

This is more "winning" than I can handle.