The American debt crisis has reached a new high.
A variety of factors have led to the amount Americans owe climbing to a record-breaking high: On Tuesday, the Federal Reserve Bank of New York announced that, between July and September, US household debt reached a new record of $15.24 trillion, CNN reported.
Compared to the second quarter of the year, that represents a 1.9% increase. Mortgages constituted the highest aspect of the household debt, having risen an eye-watering amount in the last quarter, from $230 billion to $10.67 trillion.
The dire situation is a result of numerous recent financial trends, including the end of many COVID-19-related monetary relief programs, increasing auto prices and surging credit card spending. Indeed, the same report found that US consumers are — in a reversal of coronavirus trends — returning to pre-pandemic levels of spending and credit card balances.
Official reports have also found that the US is currently going through the worst inflation it has experienced in more than three decades. In response to the heightened inflation, Americans are spending more, as is the government — an issue President Joe Biden has called a “top priority.”
Despite the intensity of the crisis, American shoppers appear to still be open to going into debt to have a little cheer this holiday season. In fact, one recent survey from CreditCards.com found that consumers are feeling extra generous this year, with 45% saying they’re willing to spend extra cash in exchange for the happiness they presume they’ll be buying.
“We’ve seen this in recent consumer sentiment and spending data,” said CreditCards.com Senior Industry Analyst Ted Rossman. “Even though people say they’re worried about things like inflation and supply chain disruptions, they continue to spend robustly. I think this will be a strong holiday season for retailers.”