Strong Consumer Spending Linked to Increased Credit Card Debt
Consumer spending in the month of June remained strong, growing 1.1 percent in the face of increasing inflation and exorbitant gas prices. However, new data released this week by the New York Fed show a concerning link between sustained consumer spending and increased credit card debt. In the second fiscal quarter of 2022 credit card balances increased by $46 million or roughly 5.5 percent from the year’s first quarter. Moreover, the number of new credit card accounts in the country grew by 13 percent on a year-over-year basis, which is the largest recorded jump in the last 20 years. With the increase in accounts came a $312 billion or 2 percent increase in household debt, as consumers struggle to keep up with the high prices of everyday necessities. Joelle Scally, administrator of the Center for Microeconomic Data at the New York Fed, said in a press release : “The second quarter of 2022 showed robust increase...