Consumer credit continues to pick up traction as revolving debt lurched to its highest level ever, eclipsing the peak established back in July 2008. Overall, debt increased by $27.95 billion, the largest gain in 16 years, and the fastest pace in two years.
Red or Green Flag?
Revolving credit surged by a 13.3% annualized pace, up $11.19 billion, which was the biggest dollar amount of 2017. Total revolving debt now sits at $1,022,709,000,000 and is finally getting above the July 2008 high point of $1,020,482,000,000. These numbers and dates obviously recall the Great Recession that began in December 2007.
I continue to say the spike in the use of credit cards and revolving debt is a sign of confidence and a harbinger of a better economy. With consumer confidence near a 17-year high, this is the manifestation of confidence and pent-up demand finally being unleashed.
Moreover, households can afford their debt a lot more now than they could back in 2008, as household debt service payments as a percent of disposable income continues to hoover near multi-decade lows.
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