It sounds like those who have $ in the equity market have seen a rebound. But with consumer credit at 19% of GDP and most of that in student loan debt on the backs of younger households, that will be a huge drag on growth for years, if not decades, to come. Why ? Because younger households buy a lot of houses, durable consumer goods, etc. as they settle down, start famalies, etc. The decline in household debt is largely due to lower mortgage debt, particularly home equity loans. But consumer credit has continued to rise and now equals a record 19 percent of G.D.P. That is largely because of the continued surge in student loan debt — an obligation concentrated in younger households and among those who are far from wealthy. It has more than doubled since 2007. In 2006, when the Fed began to report on student loan debt as a separate category, the debt totaled $509 billion, or 22 percent of total consumer debt. Now, it equals $1.3 trillion, a 40 percent share of consumer debt.
Posted on: Sat, 20 Sep 2014 20:07:51 +0000
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