Credit Card Debt is Growing

Should we be worried about the consumer?

Last week, the busiest airport in the United States had its busiest day ever. The Hartsfield-Jackson Atlanta International Airport screened 111,000 people, blowing past the previous record of 104k travelers set after the Super Bowl in 2019.

Consumers are spending like there’s no tomorrow. Is this a sign of a booming economy, or are people getting out over their skis?

As I wrote yesterday, consumers, particularly at the low end, are doing much better than most people think. Their cash buffers are higher than average, and their incomes have greatly outpaced inflation.

That’s the good news. The bad news is that it looks like there might be reasons to believe that spending is increasingly being fueled by debt we can’t repay.

Before we talk about credit card debt, somebody replied to my post that people with multiple jobs are something to pay attention to.

It’s true that more people are working multiple jobs today than at any point in this data series.

But if you adjust for the working population, we’re right at the long-term average, so nothing major to worry about there.

One more thing on this. I was reading Kyla Scanlon’s excellent new book, "In This Economy,” and she was writing about what this data might mean, citing the chief economist at ZipRecruiter, who said, “Public perception is that people take on multiple jobs when the economy is bad because they’re not earning enough in their job. People take on additional jobs when there are additional jobs to be had.”

Turning to credit cards. This chart from the Federal Reserve Bank of St.Louis doesn’t look great.

However you slice this, these lines are going in the wrong direction.

All these charts go back to a point I made yesterday; this stuff is complicated. It’s easy to find data to support whatever argument you’re trying to make.

On balance, the consumer is doing fine and spending like crazy. But I’m going to keep an eye on this data going forward. Credit is part of a strong consumer-driven economy. Paying back what you borrow is critical to making sure the machine runs smoothly.