The gradual rise in interest rates has not yet dampened Americans' appetite for borrowing. New loans increased to 13.3 trillion US dollars in the second quarter, continuing the slow rise in US household loans over the past four years.

According to the Federal Reserve Bank of New York's quarterly report on household debt and credit, total US debt increased by 82 billion US dollars in the second quarter, driven by rising mortgages, credit cards, and auto loans.

Total US debt is now higher than it was before the financial crisis, when widespread debt defaults (especially mortgages) caused the longest and worst recession since the Great Depression.

As the US economy grew, so did total debt. Total household debt in the US accounted for about 65% of gross domestic product (GDP) in the second quarter. This ratio has remained steady in recent years, and is also lower than during the financial crisis. In 2009, when the economy was shrinking and deleveraging had not yet begun, total US household debt accounted for about 87% of GDP.

By Josh Zumbrun


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