Americans’ debt is growing — but so are incomes

Americans are continuing to pile on debt at record levels — but for many households, those IOUs are completely manageable, according to new data released Wednesday.

Americans are continuing to pile on debt at record levels — but for many households, those IOUs are completely manageable, according to new data released Wednesday. US household debt (not adjusted for inflation) moved up to a fresh record total of $17.94 trillion as of September 30, according to the Federal Reserve Bank of New York’s latest Quarterly Report on Household Debt and Credit. Balances grew across all major debt categories, with credit cards and auto loans continuing to see the biggest gains. However, by and large, most households have been able to handle that rising debt: Their after-tax income has grown even more, according to the New York Fed. Disposable personal income hit $21.8 trillion in the third quarter, bringing the total debt balance to income ratio to 82%. That ratio was 86% in 2019 (and hit a monstrous high of 120% during the height of the Great Recession in 2008). However, not all debt experiences are equal. Delinquencies were still on the rise, although showing some moderation, which New York Fed researchers described as “cautiously positive news.”