Household Debt Is At A Peak, But Here’s Why There Are Better Things To Worry About

Americans owe more money than before.

The Federal Reserve Bank of New York has a Household Debt and Credit Report.

There is no need for economists, macro observers and business-news outlets to wringing their hands about this. The context has been missing from a lot of discussions. You can see the shaded area in the chart. We're talking about that.

Household debt is going up. People will buy more things at higher prices.

Jonathan Adams, an economist at the University of Florida, told Forbes that household debt should be linked to inflation. Debt levels tend to rise when prices go up.

How much Americans owe isn't important according to Adams. Can they make their monthly payments?

U.S. households are in a good position to do that right now.

The Federal Reserve shows that household debt service is near its lowest level on record.

The average quarterly reading over the last 42 years has been 9.6%. Before the housing market went bust, more than a third of disposable income was spent on debt payments.

Adams said that household debt service as a share of income is more useful for understanding household debt burdens than the dollar value of their liabilities.

The amount of Americans' debt is on the rise. Absolutely, that's true. There are things to be worried about.