Household Debt Flow Increases Most Since December 2007
According to the Federal Reserve's Flow of Funds report, households added $105.8 billion of debt in the third quarter of 2013. This is the sixth time in the last eight quarters that households have increased their level of debt. Since the first quarter of 2011, the trend has been for households to add more debt each quarter. Although, household debt flow is more volatile than it was prior to financial collapse in 2008. The increase in household debt is both good and bad news. It's good news in the short term because it tends to correlate with an increase in durable goods spending. It's bad news in the long term because households still have far too much debt. However, household debt as a percent of GDP is the lowest it has been since December 2002.
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