Household Debt Takes Biggest Leap Since 2007
And that might mean good things for the economy
By Kevin Spak, Newser User
Posted Feb 19, 2014 10:04 AM CST
In this Thursday, April 25, 2013, file photo, MasterCard credit cards are displayed.   (AP Photo/Toby Talbot)

(Newser) – US household debt spiked by $241 billion in the fourth quarter, up to $11.5 trillion, according to a new report from the Federal Reserve Bank of New York. It's the biggest increase seen since the financial crisis, and the first on a year-over-year basis. That might actually be a great thing for the economy, the LA Times reports. "The fact that people are borrowing more is a positive sign that they have more confidence in the economy and their jobs," one economist explains. "They're starting to buy homes and cars again. These are good things."

But the New York Fed's senior vice president was less confident. "Good or bad, it's hard to say," he told the New York Times. The increased borrowing could instead indicate that families are struggling. "The problem is you're not seeing job growth; you're not seeing wage growth," another analyst said. "We're still overleveraged by any historical measure." The debt increase was driven by mortgages and car loans—which are generally good signs—but student loans, which aren't, were the biggest risers with 5.2% growth.

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Showing 3 of 32 comments
Feb 19, 2014 8:34 PM CST
Since Obama took office, the average median household income has dropped a few thousand dollars, record amount of Americans on food stamps and government assistance, high unemployment rate with the lowest amount of working Americans in decades, and no new jobs created (except in the public sector which taxpayers pay for). I really don't think this is good news!
Feb 19, 2014 3:37 PM CST
Obama Zombies are Walking Dead through this comment board. Reminds me of a couple weeks ago when they thought millions of people were going to lose their jobs from ObomneyCare, yet it was actually millions of people able to voluntarily leave jobs they only had to get health care. Orlandojon is an inane zombie. Obama is one of the smallest spenders in US history, significantly better than any republican president over many decades. But there he is... posting his ignorant haters rants like Obama was the worst thing ever, worst president that the republicans never could come close to replace him.
Feb 19, 2014 2:55 PM CST
People are living on credit just like the federal government...Obamanomics