A consumer economy

U.S. consumers sat on $4.1 trillion of debt as of May 31, the highest level since the U.S. Treasury began recording the data in the 1940s. Consumer spending, the prime mover of the U.S. economy, also sits at a record high of about $14.5 trillion. The percentage of that spending that consumers are financing via credit was 28.3%. While this is an historic high, the rate of growth has slowed in recent years.

The amount of spending financed by consumers accelerated in the post-recession years from early 2010 until about the point that the Fed had realized enough was enough and began to raise the discount rate. At that point, mid-December 2015, consumers felt less confident and slowed their borrowing relative to their spending. Credit card assessment rates in the period following the rate hikes have spiked, rising from slightly more than 13% in early 2016 to 17.2% as of May 31.

Most of the debt, mortgages excluded, was in student and auto loans. Student debt, which stood at $1.6 trillion in March (the most recent available data) is up 30% from the end of 2014, while auto loans rose 21% in the five-year period.