Discussion Paper

Rising Household Debt: Increasing Demand or Increasing Supply?

Abstract: Total consumer debt continued to increase in the first quarter of this year, marking the first time since the recession that aggregate debt had grown for three consecutive quarters, according to the May 2014 Quarterly Report on Household Debt and Credit. Is this increase in household debt driven by changes in supply or demand? The January 2014 and April 2014 Senior Loan Officer Opinion Surveys (SLOOS) show an increase in lenders? willingness to make consumer loans over the last several quarters and an increase in the number of lenders reporting looser lending standards, which indicates that credit supply is increasing. To get a better sense of the underlying factors in the evolution of household credit conditions, in February we surveyed 1,110 respondents of the New York Fed?s Survey of Consumer Expectations (SCE) about their ability to obtain credit over the past twelve months and their expectations about future credit access.

Keywords: credit demand; credit expectations; household debt;

JEL Classification: D1;

Bibliographic Information

Provider: Federal Reserve Bank of New York

Part of Series: Liberty Street Economics

Publication Date: 2014-05-28

Number: 20140528