The State of U.S. Household Debt
- U.S. household debt rose to $13.3 trillion as of the second quarter of 2018, according to the Federal Reserve Bank of New York – higher than the previous peak of $12.68 trillion in the third quarter of 2008.
- The growing level of debt is a direct reflection of the solid job market and rising optimism about economic growth among both banks and lenders, allowing Americans to improve their credit and qualify for loans.
- While household debt surpassing previous high points may sound worrisome, it’s not necessarily cause for concern. The total number of Americans borrowing relative to the size of the U.S. GDP – as well as the household debt-to-income ratio – remains well below prior peaks, which could reflect improved management of household debt and a stronger economy.