External Debt | Weekly Extract May 22

U.S. debt

Based on various external and internal debt statistics, the United States is the most indebted country in the world. This is not just the fault of the government, which accounts for a foreign debt of $$31 trillion. According to the Federal Reserve, U.S. household debt reached a record $16.9 trillion at the end of 2022, an increase of $2.75 trillion from 2019. U.S. credit card debt has increased from the pre-pandemic peak of $927 billion to $986 billion.

Mortgage debt stands at $11.92 trillion, while auto debt is $1.55 trillion and school debt is $1.60 trillion. Not surprisingly, debt delinquency, defined as payments 30 days or more past due, has also increased for nearly all loan types given the increase in average U.S. consumer debt.

Risk of non-payment

Debt ceiling talks in Washington continue after senior lawmakers met with President Joe Biden at the White House on Tuesday. The parties involved are working to resolve differences ahead of a looming deadline when the U.S. could face the risk of a default. After yesterday's meeting, lawmakers expressed optimism that a default on the foreign debt would be avoided.

Biden will travel to Japan for the weekend meeting of G-7 world leaders, but is cutting short the rest of the Asia trip as the debt ceiling issue persists. In remarks this morning, he said, "Let's unite, because there is no alternative to do what is right for the country.".

Financial data

In economic news, the 242,000 new claims for unemployment benefits came in below forecasts and down from the previous week, another indication of a tight labor market. More than expected, used home sales declined 3.4% in April compared to the prior month. April housing starts of 1.4 million annualized were about even with expectations, but March's figures were revised lower.