How do these Trends Affect your Business?

Jim’s View

TOTAL HOUSEHOLD DEBT REACHES HIGH SINCE RECESSION

Total household debt surpassed the peak reached during the 2008 Great Recession in the first quarter of this year. It reached $12.73 trillion in the last quarter compared to its $12.68 trillion peak during the recession.

Mortgages increased somewhat. Auto loans increased $10 billion and student loans increased $34 billion.  Credit card balances declined by $15 billion to $764 billion.

Overall the first quarter marked a $149 billion quarterly increase and reflects a nearly three-year continued growth in debt.  

Auto loans and credit card delinquency flows are now trending upwards and those for student loans remain stubbornly high.   Outstanding student loan balances reached $1.34 trillion as of March 31, 2017.  The Fed says there is delinquency debt of 11% over 90 days…..but don’t believe it.  The way the Fed calculates, it leaves off a sizeable portion of delinquent student loan debt in their reporting.

Auto loan delinquency rates first quarter…3.8 %

Credit card delinquencies….7.5 %

Mortgage delinquencies continued to improve, but the bar was surely low with all the mortgage walk-aways and slow or no pay on mortgages during the Great Recession.