Credit card balances hit new high among U.S. consumers

License picture” alt=”Even as U.S. consumer inflation pulls back from early-year highs of more than 9%, New York Federal Reserve report finds consumer debt continues to increase. File photo by Gary C. Caskey/UPI | License picture“/>

Even though consumer inflation in the United States is moving away from early-year highs of more than 9%, a report from the New York Federal Reserve reveals that consumer debt continues to rise. File photo by Gary C. Caskey/UPI | License picture

November 15 (UPI) — As inflationary pressures ease, Federal Reserve The Bank of New York said on Tuesday consumer debt was on the rise, with credit card balances jumping $38 billion year-over-year.

A debt report from the New York Fed finds that total consumer debt increased by $351 billion between the second and third fiscal quarters to $16.5 trillion. Household debt is now $2.36 trillion higher than at the end of 2019, before the start of the recession. COVID-19[feminine] pandemic.

This debt comes despite the huge amount of federal stimulus offered in response to the pandemic. Three rounds of consumer-level stimulus put thousands more dollars in the wallets of American taxpayers, though the New York Fed found credit card balances jumped by $38 billion.

“The 15% year-over-year increase in credit card balances represents the largest in more than 20 years,” the Fed said.

It comes like consumer inflation is slowing from peaks of more than 9% year-on-year since the start of 2022. The US Bureau of Labor Statistics showed last week that inflation rose 7.7% over the 12-month period ending in September.

Among commodities, grocery prices rose 12.4%, while rents and mortgages rose 6.9% over the 12-month period.

“Credit card, mortgage and auto loan balances continued to rise in the third quarter of 2022, reflecting a combination of robust consumer demand and higher prices,” said Donghoon Lee, an advisor in economic research at the New York Fed.

The US Federal Reserve is trying to both curb demand and reduce inflation by raising its key rates.

In October’s Beige Book, an indicator of economic conditions in each Federal Reserve district, the New York Fed said most of its business contacts reported prices were up, although prices for some essential products such as wood and fuel have been moderated.

Consumer spending, meanwhile, was relatively subdued amid expectations of a “tepid” holiday sales season. Some retailers, however, reported improved sales as more workers returned to the office.

On consumer debt, the New York Fed said student loan debt was $1.57 trillion, though only about 4% of total loans were past due or defaulted. payment for 90 days during the third quarter. Reported amount of student debt had fallen due to some payment relief, though debt may rise as president Joe Bidenloan cancellation program get stuck in the courts.

However, low defaults are somewhat isolated from student loans. The New York Fed found that delinquencies increased for almost all types of debt, after two consecutive years of improvement.