U.S. Demand For Household Debt Climbed In Q2

• U.S. consumers' demand for new debt grew in the second quarter and credit card use rebounded, reversing the trend of declining card use seen earlier in the coronavirus pandemic, according to a report released on Tuesday by the New York Federal Reserve. 
• Total household debt increased by $313 billion in the second quarter to $14.96 trillion, the New York Fed said in its quarterly report on household debt and credit. Mortgage debt continued to be the biggest driver of that growth, rising by $282 billion to $10.44 trillion by the end of June. 
• "We have seen a very robust pace of originations over the last four quarters with new extensions of credit for mortgages and auto loans combined with rebounding demand for credit card borrowing," Joelle Scally, administrator of the Center for Microeconomic Data at the New York Fed, said in a statement. 
• The increased demand for debt is likely supported by the low-interest rate environment in the US and is also reflective of the increase in the consumer confidence which was at a 17-month high in July. Consumer confidence held up despite the Delta variant of the coronavirus driving a surge in new infections mostly among the unvaccinated. "Higher confidence suggests that consumer spending should support robust growth in the second half of this year," said Priscilla Thiagamoorthy, an economist at BMO Capital Markets in Toronto.

(Source: Reuters & NCBCM Research)