Americans Added $1 Trillion In New Debt Last Year

1. Consumer Debt Tops A Record $15 Trillion

2. GDP Rose 7% in 4Q, Up 5.7% For All Of Last Year

3. Household Debt Is Now At Highest Level On Record

4. Consumers Added $1 Trillion In New Debt In 2021

5. Personal Debt By Age Group – Excluding Mortgages

Overview – Consumer Debt Tops $15 Trillion, GDP Up 7%

American households took on over $1 trillion in new debt in 2021 for only the second time in history, pushing consumer debt above $15 trillion for the first time ever. The near-record increase in household debt came despite various government stimulus programs last year, including checks directly from the Treasury.

The Federal Reserve, which issued the report on household debt last month, said the large increase was driven in part by soaring prices for homes and automobiles among other big-ticket items. We’ll look at the underlying factors as we go along today.

Following that discussion, we’ll look at outstanding consumer debt by age group – excluding home mortgage debt. I think you’ll be surprised to see how much debt each generation owes even without their mortgages included.

Before we get to our discussion on the spike in household debt, let’s look at the latest report on Gross Domestic Product for the 4Q, which came out last week. The economy grew at an annual rate of 7% in the final three months of last year. For all of 2021, the US economy grew at the fastest pace since 1984 as we rebounded from the brutal COVID recession of 2020.