Commentary
U.S. household debt increased by 15.2 percent last year and now stands at 36 percent of the GDP, while household financial savings are at the lowest in 30 years.
Household savings fell from 7.3 percent of GDP in 2021 to 4 percent of GDP in 2022. If savings do not increase, consumption and investment could decline. This would result in higher unemployment and mark the beginning of a rescission. The trend may have already started as new hiring is slowing down.
The average household now owes $17,066 in credit card debt, up 15.17 percent compared to 2021. The average mortgage debt per household is $22,592—an increase of 8.54 percent. And auto loans increased by 5.31 percent, hitting $28,975 per household. An extremely worrying number is the amount of revolving debt households have. The credit card debt people roll from month to month has increased by 28.73 percent and is now $7,486….