American household debt hit record $16.9T in last quarter of 2022

Americans continued to add to their debt at the end of last year — and grew their credit card balances at record rates, according to data released Thursday by the Federal Reserve Bank of New York.

Total U.S. household debt hit a record $16.9 trillion during the fourth quarter, an increase of $394 billion, or 2.4%, from the prior three-month period, according to the Fed’s latest Quarterly Report on Household Debt and Credit. While the lion’s share of the debt is attributable to mortgages, the report showed that not only are credit card balances swelling at record levels, delinquencies are on the rise as well.

Credit card balances increased nearly 6.6% to $986 billion during the quarter, the highest quarterly growth on record, according to New York Fed data that goes back to 1999. Year over year, credit card balances grew 15.2%.

Report of continuing inflation wallops markets

Wall Street tumbled Thursday, and stocks fell by the most in four weeks following more evidence that high inflation is staying stickier than expected.

The S&P 500 dropped 1.4% after a report said inflation at the wholesale level slowed by less last month than economists forecast. It echoed a report on prices at the consumer level from earlier this week that suggested inflation isn’t cooling as quickly and as smoothly as hoped.

The Dow Jones Industrial Average lost 431 points, or 1.3%, while the Nasdaq composite dropped 1.8%.

Thursday’s inflation report showed that prices at the wholesale level were 6% higher last month than a year earlier. While that was a slowdown from December’s rate, it was worse than what economists expected. Perhaps more concerning was that inflation accelerated in January on a month-to-month basis even after stripping out prices for food, energy and other layers.

The inflation report thudded onto Wall Street along with a batch of other data painting a mixed picture of the economy.

Fewer workers applied for jobless benefits last week than expected, a sign that layoffs remain low across the economy. That’s good news for workers and another signal of strength for the job market, but the Fed worries it could also add upward pressure on inflation.

Other reports showed a measure of manufacturing activity in the mid-Atlantic region plunged this month, while homebuilders broke ground on fewer homes last month than economists expected.

Judge mulls revoking FTX founder’s bail over his use of the internet

A federal judge showed growing impatience Thursday with FTX founder Sam Bankman-Fried’s use of the internet while on bail, suggesting that incarceration might eventually be the most effective way to prevent him from communicating on electronic devices in ways that can’t be traced.

Judge Lewis A. Kaplan did not immediately change a $250 million bail package that lets Bankman-Fried live with his parents in Palo Alto while preparing for trial on charges that he cheated investors and looted customer deposits at FTX, his cryptocurrency trading platform.

But he raised the possibility for the first time that jail might be the only way to ensure Bankman-Fried won’t outfox the government with ways to use electronic devices in ways that can’t be tracked.

“There is a solution, but it’s not one anybody’s proposed yet,” Kaplan said as Bankman-Fried sat passively at the defense table. He then noted that there may be many devices in Bankman-Fried’s family home that the government will not be tracking, even with any new rules imposed on his bail conditions.

— Compiled from CNN and Associated Press reports.