A new federal report shows U.S. consumers are steadily building debt once again, with the end of 2013 seeing the first annual increase in debt since the Great Recession
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The fourth quarter of 2013 saw the largest quarterly increase in debt since before the Great Recession hit in 2007. The year 2013 also marked the first annual increase in total outstanding consumer debt since late 2008, according to a new federal report.Outstanding household debt increased $241 billion from the end of October 2013 to the end of the year, said the Federal Reserve Bank of New York’s Household Debt and Credit report, released Feb. 18. As of Dec. 31, 2013, total consumer debt was $11.5 trillion. That represents a 2.1 percent increase from the previous quarter and a 1.6 percent ($180 billion) increase for the year.
Overall consumer debt remains 9.1 percent below the peak of $12.7 trillion, reached just as the recession hit its bottom in the third quarter of 2008.
Although the 2013 debt accumulation was largely led by a $152 billion (1.9 percent) increase in mortgage debt, credit cards contributed significantly as well. Credit card debt increased by $11 billion in the fourth quarter of 2013. That brings total consumer credit card debt to $683 billion. The 90-day delinquency rate on credit card balances also increased slightly, to 9.5 percent in the fourth quarter.
“This quarter is the first time since before the Great Recession that household debt has increased over its year-ago levels, suggesting that after a long period of deleveraging, households are borrowing again,” Wilbert van der Klaauw, senior vice president and economist at the New York Fed, said in a press release.
This data comes from the New York Fed’s Consumer Credit Panel, a nationally representative sample drawn from anonymized Equifax credit data.
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