US consumer debt surge can't outpace wages forever

US consumer debt surge can't outpace wages forever

American consumers are currently taking out debt at a far faster rate than their real incomes or the US economy is surging, and America might be hitting a fresh high in employment.

US consumers have run up more than $1 trillion on credit cards, reaching a level not observed since January 2009 and up 6.2% from the previous year. By the way, wages are up less than 3% and the American economy is surging just under 2% a year.

Student as well as car loans are also at $1-trillion-plus levels and also surging twice as fast as  wages or the US economy.

The overall percentage of disposable income the average household requires to service debt is approximately 10%, close to all-time minimums. The same applies to interest rates. By the way, when interest rates change at extremely low levels, small increases in absolute terms imply huge increases in proportional ones.

Fed tightening, and also both balance sheet as well as interest rate variety will just serve for the purpose of straining liquidity conditions and raising debt service costs. 

 

Similar

Euro zone output rallies more than anticipated in December

In December, euro zone industrial output inched up more than anticipated, as data from the Eurostat uncovered on Wednesday, pointing to the fastest economic surge rate for a decade that financial analysts expect to remain this year…

Australian Jobs Data

The state of a country’s labor market has a direct impact on its economic growth…

British inflation keeps to sex-year maximum in January

In January, British inflation suddenly demonstrated its highest value for almost six years, dropping hint at the challenge faced by the BoE as well as soaring expectations of a jump in interest rates already in May…

Popular

Yen climbs up in Asia trade

On Friday, the Japanese yen leapt in Asia on safe-haven demand because political turmoil in Brazil reached risk sentiment and financial markets became cautious ahead of the weekend…

Pound tumbles vs yen

On Tuesday, the British pound sank versus the Japanese yen after a suspected terrorist attack at a concert in Manchester, while the common currency hovered close to a six-month peak versus the greenback after German Chancellor Angela Merkel told that the…

promotions you can be interested in

Deposit with your local payment systems

Callback

A manager will call you shortly.

Change number

Your request is accepted.

A manager will call you shortly.

Internal error. Please try again later

Beginner Forex book

The most important things to start trading
Enter your e-mail, and we will send you a free Beginner Forex book

Thank you!

We've emailed a special link to your e-mail.
Click the link to confirm your address and get Beginner Forex book for free.

You are using an older version of your browser.

Update it to the latest version or try another one for a safer, more comfortable and productive trading experience.

Safari Chrome Firefox Opera