Tuesday, July 23

The debt of Americans has gone up by a record high

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Americans’ loan debts are increasing: causes of the problem

Experts conducted an analysis of the consumer capacity of US citizens. It turned out that the U.S. loan debts have grown to over $ 14 trillion, which was a record for the country. Mortgages account for a large share of the amount. According to the analysis, the volume of payments on credit cards, which were not repaid on time, is increasing. Most debtors belong to the age group from 18 to 29 years.
In total, consumer debts have increased by 1.4% during the year, while the total amount of $14.2 trillion is $1.5 trillion more than in 2008, during the financial crisis. As noted by the Federal Reserve Bank, the growth of debts has been observed for 22 quarters.
The amount of unpaid mortgages is over $9 trillion, and this figure has increased by $433 billion for the year. This segment has become a leader in terms of debt volumes. Second place was taken by repaid student loans, which amount to about $1.5 trillion, while almost $100 billion here – the debts of people over 60.
The same figure of $57 billion increased the amount of unpaid loans for car purchase and credit cards. The record was set by debtors aged 18-29 years. The figure here increased by $1 trillion.

According to officials, the problem of growing debts in the credit sector has been observed since 2016, but now it has reached record highs. Despite the indicators, experts note that the U.S. economy still remains strong. However, some age groups have difficulties in repaying debts, as seen in the example of student loans among 20-30 year olds. The reason in this case is an insufficient level of income.
The US budget deficit is also growing. In 2018, it stood at $779 billion, the highest level since 2012, and 2019 has beaten it too. Specialists are taking all possible measures to control the situation. Decrease in the discount rate, which happened last year, allowed to slow down the negative processes a little, the Federal Reserve does not intend to continue such policy.
Despite the existing difficulties, the American economy continues to strengthen. The GDP has been growing for a long time and experts say it is the longest period of growth. This cycle of growth has been observed since the summer of 2009, and when it ends, experts cannot say for sure. At the same time, the indicators are not significantly affected by the trade conflict with China and the processes in the European Union.

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