For the first time since it began keeping records, the Federal Reserve Bank of New York said Tuesday that U.S. consumers are carrying a collective $1 trillion in credit card debt.
The New York Fed said credit cards were the largest, single source of consumer debt, increasing by $45 billion during the second quarter to stand at $1.03 trillion.
“After a sharp contraction in the first year of the pandemic, credit card balances have seen seven quarters of year-over-year growth,” the bank’s report read. “The second quarter of 2023 saw a brisk 16.2% increase from the previous year, continuing this strong trend.”
The report masks what would otherwise be seen as positive news for the U.S. economy, the world’s largest. The Conference Board in its final report for July said consumer confidence was at its highest level in two years, recording two consecutive monthly gains.
Consumer-level inflation, meanwhile, is down sharply from year-ago levels, though Moody’s Investor Service put several banks on notice and warned of a mild recession for the U.S. economy.