Consumer debt spiked in April
Consumer debt is back in the US. Matt Phillips at Quartz reports that after a long period of low or negative debt since the crisis, households seem to be breaking out their credit cards again. In April, revolving consumer debt spiked above $5 billion for the first time since 2008:
Phillips explains why that’s a bad thing:
So is an increase consumer credit use good news or bad news? Well, if you’re simply rooting for GDP growth, without regard for how it occurs, you can argue that this is a great sign. Roughly 70% of US economic activity is driven by consumption … But if you care about the long-term sustainability of US economic growth and the financial health of American households, it’s not particularly heartening to see signs of backsliding into a widespread reliance on credit cards.
There’s more on this phenomenon at Quartz.