In a concerning development, the debt of US citizens has exceeded the significant milestone of $17 trillion, highlighting the fragile state of the country's economy. This record-breaking figure was reported by the Federal Reserve Bank of New York, which also revealed that household debt reached a new high of $17.05 trillion in the first quarter. This represents a growth of 0.9%, equivalent to $148 billion, compared to the fourth quarter of the previous year.
It is important to note that the debt has escalated by a staggering $2.9 trillion since the final months of 2019. This alarming trend emerges at a time when the US government is engaged in debates regarding a potential increase to the debt ceiling. This situation poses the risk of a distressing debt default, which could have significant consequences for the economy.
The United States has been facing a highly precarious economic situation in recent years, marked by various macroeconomic factors, conflicts over inflation, and a decline in the value of the US dollar. Adding to this unease, the debt levels of American citizens have reached alarming heights.
Recent reports indicate that US citizens' debt has exceeded the unprecedented milestone of $17 trillion, reflecting the severity of the situation. Moreover, in the first quarter, there has been a noticeable increase in debt across multiple avenues. This includes record-high balances for mortgages, home equity lines of credit, as well as loans related to education, automobiles, and other expenses. These rising debt levels across different sectors further exacerbate the concerns surrounding the economy.
While various avenues of debt experienced an increase, credit card balances remained steady at $986 million, which is a notable exception. In fact, this is the first time in over 20 years that credit card balances did not decline, as reported by CNN. This unique occurrence highlights the uncharted territory of the current economic situation.
Matt Schultz, the chief credit analyst at LendingTree, expressed concern over this development and suggested that it could be indicative of future trends. He stated that the fact that credit card balances did not decrease in the first quarter of the year does not bode well for the rest of the year. This observation is significant considering that many Americans rely on credit cards to cover their essential expenses, emphasizing the potential financial challenges that lie ahead.