Americans are holding more household debt than ever before as one of the country's largest banks warns of weakening U.S. consumer demand.
U.S. credit card debt just hit a record high of $1.14 trillion, according to a report from the Federal Reserve Bank of New York.
Overall, Americans now have more student loans, mortgages, credit cards, and revolving mortgage debt than at any time in history.
The Fed says:
"Total household debt balances increased by $109 billion in Q2 2024, up 0.6% from Q1 2024. Balances now stand at $17.80 trillion and have increased by $3.7 trillion since late 2019, just before the pandemic recession."
The Fed also said delinquency rates for credit cards, auto loans and mortgages rose slightly in the second quarter, and that about 4.9% of consumers had third-party collection accounts.
Consumers also appear to be experiencing a slowdown in growth amid rising debt burdens.
In a new interview with FOX Business, Bank of America CEO John Moynihan said the bank's consumer base is currently spending half as much as it did last year, a sign of consumer "exhaustion."
"Well, in our consumer base of 60 million customers who are spending every week, you see that they are spending at the rate of growth this year over last year, in July and August so far, about 3%. That's half of what they were at this time last year. And so the consumer has slowed down. They have money in their accounts, but it's depleting a little bit. They're working, they're making money, but if you look at it, they've really slowed down.
So the Fed is in a position where they have to be careful not to slow down too much. Right now, where they're spending is consistent with where they were spending in '17, '18, '19, lower inflation, more normal economic growth."
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