US debt climbs to $ 55.9 billion due to higher corporate and government borrowing


George Washington is seen with a medical mask printed on dollar bills in this illustration taken on March 31, 2020.Dado Ruvic | Reuters

Federal debt jumped and household net worth fell in the first three months of the year as a result of the initial impact of the coronavirus pandemic, according to data from the Federal Reserve released on Thursday.Total domestic non-financial debt jumped 11.7% to $ 55.9 trillion, the Fed said in its quarterly release on domestic financial accounts. Debt increased by 3.2% in the fourth quarter of 2019.

At the same time, the fall in stock prices reduced net worth, which fell from $ 7.4 trillion to $ 110.8 trillion. Wall Street, however, registered a strong recovery from its March lows, much of which was likely offset. The value of stocks fell $ 7.8 trillion, while the value of real estate rose $ 400 billion in the first quarter.

The largest debt gain came from the corporate sector, up 18.8%, while the federal government’s debt also jumped 14.3%. Total federal debt recently exceeded $ 26 trillion.

Household debt increased 3.9%, largely due to an increase in the mortgage side of 3.2%. Consumer debt increased 1.6%.

The increase in debt and the decline in the value of households took place as the longest expansion in US history came to an end.

Earlier this week, the National Bureau of Economic Research said a recession started in February after an 11-year expansion. The bull market in stocks ended the same month but turned around on March 23.


Please enter your comment!
Please enter your name here