The flow of funds report published today by the Federal Reserve Bank shows that U.S. household debt increased at an annual rate of 1.2%, the largest increase since the first quarter of 2008. Non-financial sector debt rose by a seasonally adjusted annual rate of 4.9% in the second quarter of 2012, 1.5% more than in the first quarter.
For the first time in more than two years, state and local government debt also rose, by 0.8% in the second quarter. Federal debt rose by 10.9% in the quarter, the smallest increase since the second quarter of last year.
Total borrowing by U.S. households rose by $157.3 billion in the second quarter, only the second of the last 17 quarters to show an increase. Total U.S. household debt is just a shade under $13 trillion.
Consumer credit rose by 6.2% as student and auto loans once again jumped. And the falling…
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