Federal Reserve Bank of St. Louis. "Consumer Debt Growth Stalls Despite Strong Sectors, Vol. 1, Issue 3, Covering 2016:Q3," Quarterly Debt Monitor : Trends in Consumer Debt in St. Louis, Little Rock, Louisville, Memphis - and Beyond (2016:Q3). https://fraser.stlouisfed.org/title/6285/item/603191, accessed on May 22, 2025.

Title: Consumer Debt Growth Stalls Despite Strong Sectors, Vol. 1, Issue 3, Covering 2016:Q3

Authors: Schlagenhauf, Don E., Ricketts, Lowell R.
Date: 2016:Q3
Page 1
image-container-0 VO L . 1 , I SS U E 3 , COV E R I N G 2 01 6 : Q 3 D e b t Consumer Debt Growth Stalls Despite Strong Sectors By Lowell R. Ricketts and Don E. Schlagenhauf I n the third quarter of 2016, the upward trend in per capita consumer debt slowed in the United States and in most of the large metropolitan statistical areas (MSAs) in the Eighth Federal Reserve District. 1 In fact, for the entire nation, total per capita consumer debt fell by a tenth of a percent. Mortgage, auto and credit card debt increased by less than they did in prior quarters. Serious delinquency rates largely improved, with the exception of auto debt. The special section in the report for this quarter focuses on consumer debt trends in the smaller MSAs in the District. Included are Evans- ville, Ind.-Ky.; Fayetteville-Springdale-Rogers, Ark.-Mo.; Jackson, Tenn.; and Springfield, Mo. This report uses the latest release of the Federal Reserve Bank of New York and Equifax Consum- er Credit Panel with data as of the third quarter of 2016. The subset of figures in this report helps to provide a focused narrative of the latest developments in consumer debt across the Dis- trict and nation. For a full set of updated figures, see the QDM appendix. 2 Executive Summary 1. In the third quarter of 2016, real per capita consumer debt for the nation declined after an extended period of positive growth. Across the major District MSAs, total per capita debt changed by less than a percent, with the excep- tion of a 1.4 percent increase in Little Rock. 2. Per capita mortgage debt declined in the nation by 1.7 percent and across District MSAs by an average of 2.2 percent. 3. Auto debt grew at a rapid 8 percent rate across the nation in the prior quarter and slowed to a 6.2 percent growth rate in the third quarter. TABLE 1 Changes in Per Capita Debt Levels and Serious Delinquency Rates Year-over-Year Percent Change from 2015:Q3 to 2016:Q3 2016:Q3 United States St. Louis MSA Total –0.1 0.1 1.4 0 0.4 Mortgage –1.7 –2.2 –1.8 –2 –2.7 HELOC –2.9 –4.3 3.5 2.3 –6.5 Auto 6.2 5.5 5.9 6.9 6.1 Credit Card 0.7 1.9 4.9 0.4 3.6 Student 6.7 7.1 8.1 5.8 7.9 Mortgage –0.6 –0.3 –0.3 0 –0.6 HELOC –0.4 0 0.1 0.5 0 Auto 0.2 0 0.6 0.4 0.5 Credit Card –1.8 –0.7 –0.2 –0.5 –0.5 Student –0.4 –1 0.2 2.3 –0.3 Little Rock MSA % Change in Per Capita Consumer Debt Change in Serious Delinquency Rate SOURCE: Federal Reserve Bank of New York/Equifax Consumer Credit panel. Louisville MSA Memphis MSA NOTES: Serious delinquency rates are the share of outstanding debt that is over 90 days past due. Changes to those rates are given as the differences in percentage points. Figures are rounded. This trend was mirrored across the District MSAs with slower but still substantial growth. 4. Across the nation, credit card debt increased by a modest 0.7 percent. In Louisville, Ky., that type of debt increased at a rate similar to that observed for the U.S. Both Memphis, Tenn., and Little Rock, Ark., had percentage increases over 3.5 percent. St. Louis was in the middle of the pack with a moderate 1.9 percent growth rate. 5. Growth in per capita student debt exceeded the prior quarter for both the nation and in
image-container-1 2 2 each of the large MSAs. Growth in St. Louis and Little Rock surged by 3.9 and 4.8 percentage points, to 7.1 percent and 8.1 percent, respectively. 6. The serious delinquency rate for auto debt increased in the nation as well as in all major District MSAs, except for St. Louis. The rate for Little Rock now exceeds the peak that followed the Great Recession. 7. Consumer debt growth in the smaller District MSAs is much higher than in the larger MSAs. With the exception of Little Rock, total per capita debt was largely unchanged for the largest MSAs. In contrast, growth in Springfield, Fayetteville, and Jackson exceeded 1.1 percent. Growth of per capita auto debt averaged 10 percent in Springfield and Fayetteville. Large decreases in home equity lines of credit, or HELOC, debt were observed across all of the smaller MSAs. Why Has Consumer Debt Growth Stalled? In prior issues of the Quarterly Debt Monitor, the general theme was growth in consumer debt across the United States and the largest District MSAs. The latest data suggest that overall growth may have stalled, despite robust student and auto loan borrowing. Figure 1 presents the percentage change in per capita total debt as well as the contribution of types of debt. Across the nation, consumer debt actually declined by a tenth of a percent. Strong growth in auto and student debt wasn’t enough to offset a considerable decline in mortgage debt. The story in the four largest metro areas in the District is very similar to that of the nation. Per capita total debt was largely unchanged in St. Louis and Louisville. Memphis had modest growth, while Little Rock exhibited the strongest overall growth. Auto debt and student debt continue to grow, especially in Little Rock and Memphis. These two metro areas had the largest increase in auto, student and credit card debt. Unlike Little Rock, Memphis had much of that growth canceled out by the largest declines in both mortgage and HELOC debt. In contrast, Little Rock had the smallest decline in mortgage debt of the four metro areas and positive growth in HELOC debt. Developments for Auto and Credit Card Debt The previous Quarterly Debt Monitor noted strong growth in auto and credit card debt for the nation and most of the District MSAs. Has this growth continued? Total credit card debt grew faster across all of the District MSAs and slower for the nation. Louisville swung from a 1 percent decline in the previous quarter to 0.4 percent growth. The growth rate in Memphis and Little Rock accelerated by 0.7 and 1.3 percentage points, respectively. Figure 2 breaks down the overall year-over-year growth of credit card debt into the contributions from various age groups. 3 While credit card debt increased for the majority of groups, the largest increases occurred in the 31-40 and 56-65 groups. In Memphis, these two age groups accounted for a large fraction of the overall increase. The implications of the faster growth of potentially 0 −1.3 0.6 0.1 0 0.7 −0.1 1.4 −1.1 0.8 0.1 0.3 1.2 0.1 Percent F E D E R A L R E S E RV E B A N K O F ST. LO U I S 1 0 –1 SOURCE: Federal Reserve Bank of NY/Equifax Consumer Credit Panel. United States St. Louis MSA Louisville MSA Memphis MSA Little Rock MSA Debt Type −0.1 0.1 0.4 −1.2 −1.5 −1.6 0.5 0.5 0.7 −0.1−0.1 −0.2 0 0.1 0.2 0.6 1.2 0 0.2 0.1 Total Mortgage Auto HELOC Credit Card Student Other Contribution to Percent Change in Total Per Capita Debt 0.9 Contribution to Percent Change in Total Per Capita Debt FIGURE 1 SOURCE: Federal Reserve Bank of New York/Equifax Consumer Credit panel. NOTES: Growth in each type of debt is relative to total debt. All data labels have been rounded. Percent F E D E R A L R E S E RV E B A N K O F ST. LO U I S 6 4 2 0 SOURCE: Federal Reserve Bank of NY/Equifax Consumer Credit Panel. United States St. Louis MSA Louisville MSA Memphis MSA Little Rock MSA Year-over-Year Change in Credit Card Debt 0.6 0.2 1.3 0.6 0 0.1 0 0.2 −0.4 1 0.7 0.7 0.2 0.4 2.5 3.1 <31 31−40 41−55 56−65 66−75 75+ All Ages Age Group 0.4 −0.7 1 0.8 0.4 2 0.5 1.1 1.3 0.2 6.6 1.7 1.8 0.5 1.3 0.4 1.5 0.9 0.3 4.9 Year-over-Year Change in Credit Card Debt FIGURE 2 SOURCE: Federal Reserve Bank of New York/Equifax Consumer Credit Panel. NOTE: Figures 2 and 3 are weighted with respect to the total by debt type and do not reflect per capita growth. Percent F E D E R A L R E S E RV E B A N K O F ST. LO U I S 7.5 5.0 2.5 0.0 SOURCE: Federal Reserve Bank of NY/Equifax Consumer Credit Panel. United States St. Louis MSA Louisville MSA Memphis MSA Little Rock MSA Year-over-Year Change in Auto Debt <31 31−40 41−55 56−65 66−75 75+ All Ages Age Group 1.2 0.9 1.8 1.8 2.6 1.9 1.2 1.2 1 0.8 0.2 0.1 8 6.7 0.5 2.3 1 1.3 0.2 7.6 1.8 1.1 1.2 1 0 7.5 2.4 1.6 2 1.5 1.2 0.2 8.7 2.3 2.3 Year-over-Year Change in Auto Debt FIGURE 3 SOURCE: Federal Reserve Bank of New York/Equifax Consumer Credit Panel.
image-container-2
image-container-3
image-container-4
image-container-5
About
Collections within FRASER contain historical language, content, and descriptions that reflect the time period within which they were created and the views of their creators. Certain collections contain objectionable content—for example, discriminatory or biased language used to refer to racial, ethnic, and cultural groups.