NEW YORK–Americans ended 2025 more in debt than ever before, according to a new report on household debt by the Federal Reserve Bank, which added the data are a good illustration of the K-shaped economy.
The CU Daily had coverage of other findings in the new New York Fed report here.
The new data show balances hit a fresh high in the fourth quarter, rising by $44 billion to $1.28 trillion, a 5.5% increase from a year earlier.
The central bank’s monthly Survey of Consumer Expectations also found that fewer consumers expect their households’ financial situations to be better off a year from now — and a larger share expect to be worse off.
The report noted that near the end of the year, credit card debt often ticks higher as consumers increase their spending during over the holidays.
“Given what we are seeing in the labor market, spending is holding up quite well,” the New York Fed researchers said during a press call.
Reflection of K-Shaped Economy
According to the New York Fed’s analysis, the data shows spending has largely remained steady even as the jobs market has gyrated. But there are indications of other broader economic issues, with an obvious divide among consumers.
“You see evidence consistent with a K-shaped economy,” the New York Fed researchers said. “Some groups are really struggling.”
