Inflation has taken a bite out of the wallets of everyone in the U.S., with savings rates down and credit card usage up. This is more than an inconvenience. It is the stuff of future catastrophe, given how heavily GDP depends on consumer spending.

As of the fourth quarter of 2022, household debt rose to $16.9 trillion, according to the Federal Reserve Bank of New York. That was an increase of $394 billion. These aren’t just rebounds, but rather new records.

Credit card balances were up by $61 billion to $986 billion. The previous high was $927 billion in pre-pandemic times. After all the Covid-19 relief, things are worse than what they were. Mortgage balances were up to $11.92 trillion. Auto loan balances reached $1.55 trillion. Student loan balances, $1.6 trillion.

Here’s a Federal Reserve Bank of New York graph of total household debt, split between housing and non-housing.

Next, a graph showing growth of different types of non-housing debt.

Third, the percentage of 90-day and more delinquency by debt type. Notice the plunge of student loans. The only reason for that is current federal policy to cease repayments.

And as might be deduced from the increase in credit, there has been a significant decrease in savings rates. Here’s a graph from the Federal Reserve Bank of St. Louis showing the pattern.

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These are averages and, as such, they say both much and little. People in the upper economic strata — say the top quintile — are probably in much better shape than those further down the ladder.

However, there is a split by age that is available, and the results are disturbing. Younger borrowers are struggling with credit card and auto loan payments, according to the New York Fed. The percentage of borrowers moving into a 90-day past due category is shown by age. Younger people are feeling it sharpest of all.

The graph below — yes, another one — shows the percentage of credit card borrowers slipping into more than 90 days delinquency by age.

And auto loan delinquency growth by age.

Those who are older might shrug their shoulders and expound on how they were responsible and that it was “these kids today” who never learned how to manage their finances and lives.

First, the statement is dubious. The cost of apartments, houses, healthcare, and higher education have exploded in a way that earlier generations don’t get. If you bought a house years ago and weren’t reckless, you’ve pinned down one of the big costs of life so that when your income grew, it wasn’t immediately eaten up. You could save and invest. Student debt was much lower, and so you kept more income to build wealth.

Second, this is a problem that extends far beyond younger people alone. As the Federal Reserve has noted, after the Great Recession, counties in which households were in heavy debt relative to income at the start saw “sharper declines in consumption expenditure and employment” and slower recovery.

Those were overall results because the impact on different groups had a cumulative effect. All the experts and politicians and pundits declaring that the pandemic was over and no one needed help may have gotten their way and ended programs. But that could turn out premature beyond wisdom. If young people get mired and unable to get ahead, the entire economy will feel the impact.