Krishen Rangasamy, senior economist at National Bank Financial, notes that the U.S. household debt which continues to hit new records as the latest data from the New York Fed put household debt at US$13.7 trillion at the end of 2019Q1, up 3.5% year-on-year.
Key Quotes
“Even excluding student loans (which is up 5.6% year-on-year), household debt is still growing at a solid annual pace of 3.2%.”
“The U.S. credit expansion is happening despite relatively tight lending standards which have led to more than half of mortgage originations and a third of auto loan originations going to the highest-rated borrowers. That explains in part why delinquencies remain low despite the credit surge. The solid pace of credit growth, coupled with a hot labour market, bodes well for U.S. consumption spending this year.”
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