The Federal Reserve has released its much anticipated triennial summary of the Survey of Consumer Finances. There's a lot to digest in this important report. I fear, though, that the 2007 SCF is already hopelessly dated because of the economic turmoil of the past year.
I'll just offer a brief observation about what the SCF showed for credit card debt. The SCF is notorious for underreporting credit card debt levels--in the past, the total revolving debt reported in the SCF from voluntary interviews is off by a factor of two from what card issuers report to the Fed for its G.19 statistical release. Consumers seem to either lack awareness or be in deep denial of their debt levels. Whether this underreporting has continued in the current report is unknown, but there's not reason to think there'd be a sea change in the nature of voluntary responses.
So, with the caveat that consumer credit card debt is likely underreported in the 2007 SCF, consider this:
"Overall, the median balance for those carrying a balance rose 25.0 percent, to $3,000; the mean rose 30.4 percent, to $7,300."
Balances for revolvers grew by somewhere between a quarter and a third in three years. Wow. This bespeaks a rapid leveraging up in credit card debt for a large segement of Americans. And this was at a time when a lot of people were paying down credit card balances by doing cash-out refis on their homes. One can only imagine what credit card debt would look like absent the tapping out of home equity to pay down cards. As Paul Krugman noted today, we have a serious consumer overleverage problem, and it's going to be hard to get things on track without addressing consumer debt.