Remember a few years ago during the Great Recession when many families committed to take on less debt. They’re less committed now. As reported in Bloomberg, household borrowing surged in March at its fastest pace since November two thousand and one.
Households not only financed more automobiles, their outstanding credit card balances soared. To be precise, household debt in March expanded by nearly thirty billion dollars, which represents an annualized rate of debt expansion of ten percent. The rapid accumulation of debt caught economists off guard.
The median forecast of economists surveyed by Bloomberg called for a sixteen billion dollar increase in total consumer credit, with estimates ranging from five billion dollars to twenty four billion dollars. In other words, every surveyed economist guessed wrong by underestimating the pace of household debt accumulation.
Revolving debt, which encompasses credit card spending, posted its largest annualized advance since July two thousand. This form of debt leapt by more than eleven billion dollars in March, an annualized rate of growth exceeding fourteen percent. Non-revolving debt, which includes student loans and automobile purchases, rose by nearly nineteen billion dollars.
