Consumer debt is soaring. That's good news (for now).

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Source: www.washingtonpost.com --- Monday, July 08, 2013
America is starting to re-leverage itself. That's the implication of new data out Monday afternoon that shows that consumer credit -- credit cards, auto loans, student loans, basically every form of Debt other than mortgages -- is rising by leaps and bounds. According to the Federal Reserve's monthly report, consumer Debt rose $19.6 billion in May, an 8.3 percent annual rate. If that rate of increase were sustained it would mean there'd be an extra $235 billion in consumer credit outstanding a year from now. That would amount to more than $2,000 per household. This particular data series is jumpy, and there are broader and more reliable measures of consumer Debt (particularly those that include mortgages), such as these quarterly numbers prepared by the New York Fed. But even if the May consumer credit numbers overstate the pace at which Americans are escalating their borrowing, it fits with other data suggesting that the post-crisis period of deleveraging -- of paying down debts -- has ended. Here's the glass-half-full way of looking at this: Americans are finally feeling more confident about the economy and thus willing to take on Debt. Lenders, meanwhile, are growing more comfortable extending loans. The spending enabled by this rising consumer Debt can help create a virtuous cycle in which more demand for goods and services creates more jobs, which creates rising income. Indeed, more borrowing by households (and the spending ...

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