The latest statistics show American households are again adding debt. Too much debt was one of the factors that led to the recession. But N.C. State University economist Mike Walden says we probably aren’t going to repeat history.
“Household borrowing is up, but if you look at the total amount of debt that households are carrying now compared to where they were pre-recession, when … that was one of the factors during the recession, we’re well, well below those pre-recessionary levels. Our debt is almost $1 trillion dollars less than where it was in 2008. That’s an 11 percent drop.
“So on that note, I think were still in good shape. Also, delinquency rates are still well down from where they were during the recession — in fact, they are down by almost one-third.
“The only factor of debts — the only category of debts — where we see delinquency up is for student loans. Student loans have been taking a big, big jump. In fact, they are the category that would’ve taken the biggest jump. And student loans now exceed both auto loan debt and credit card debt.
“But other than that, I think we are in good shape regarding debt heading into a very important Christmas buying season.”