Americans have racked up over a trillion dollars in credit card debt. It really doesn't matter

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By 2023, Americans will have a record $1 trillion in credit card debt. But according to economists, a major rebound in consumer spending — the key driver of the U.S. economy — is unlikely this year.

Workers still have strong wage gains, as does the stock market In solid stateAttitudes toward the economy have improved dramatically in recent months, and consumers spent at a healthy clip during the holidays.

Card debt has indeed risen in nominal terms, but after adjusting for inflation, it's nearly 20% below the peak reached in late 2008, according to a WalletHub analysis of New York Fed data. Economists say Americans are also willing to deal with their balances.

„Consumers still have a lot of money to spend, so credit card data is often misinterpreted,” Russell Price, chief economist at Ameriprise Financial, told CNN. „The dollar value of credit-card debt is at an all-time high, but so are population, employment and consumer incomes.”

Here's what happens with credit cards: According to the Federal Reserve Bank of New York, credit card debt hit a new nominal high of $1.13 trillion from October to December.

The problem with those statistics is that they don't factor in the fact that 55% of borrowers pay off their balances in full each month, Price said. New York Fed staff noted the limitations of the data In a blog post.

According to a LendingTree analysis of more than 350,000 credit reports, the average unpaid credit card balance in the fourth quarter was $6,864.

Overall, US household debt (including credit card balances) hit a new high High $17.5 trillion in the fourth quarter, up 1.2% from the previous three-month period.

Consider the wider picture: The US job market is solid And wage growth beats inflation.

Employers added 353,000 jobs in January as the unemployment rate held steady at 3.7%. U.S. job openings have fallen steadily since peaking at 12 million in March 2022, but they remain well above pre-pandemic levels, and layoffs have not picked up in any meaningful way.

The continued strength of the job market means Americans can still pay down their debts, put money into savings, and continue to spend.

„While credit growth has accelerated, debt service costs have risen and new delinquency rates have risen, the broader U.S. debt picture is not alarming,” EY-Parthenon chief economist Gregory Dago said in a note Friday.

U.S. stocks have boosted Americans' 401(k)s, boosted by investments in manufacturing artificial intelligence-linked companies.

Credit is important in financing expenses, especially when it comes to big-ticket items like furniture and appliances. As the economy grows, so does debt.

„Our economy grows organically because of productivity growth and population growth, so we have to really disrupt growth to do the household balance sheet,” Laura Ramm, chief U.S. economist at FS Investments, told CNN.

For example, while household debt began to shrink after the global financial crisis in 2008, those debt levels began to rise again in 2013. New York Fed data.

But there is still economic pain: Inflation, it is Above the Federal Reserve's 2% target, still pinching Americans. Although it has fallen significantly in the past few years, prices remain much higher than what consumers and businesses were dealing with in the pre-pandemic era.

As inflation falls, prices don't fall, they rise quickly. A broad decline in prices would be regrettable as it would be accelerated by a severe recession.

Americans are dealing too Painfully low housing affordability And the highest interest rates in 23 years, it hurtss Borrowing costs for everything from car loans to mortgages.

So, while there's no shortage of economic constraints on people's budgets — and credit card debt is on the rise — the big picture, so far, indicates that Americans (and their economy) are healthy.

Nvidia Huawei has named itself a top contender in many areas including Critical manufacturing of processors Artificial intelligence (AI) is powering systems, reports my colleague Laura He.

The Santa Clara-based company said Wednesday Annual report Huawei was a competitor in four of its five main categories of business, including providing software and hardware for graphic processing units (GPUs), which are widely used in AI.

Other companies are also listed as its competitors Some areas include AMD (AMD), Amazon (AMZN), Microsoft (MSFT) and Broadcom (AVGO).

Huawei was named two months after Nvidia CEO Jensen Huang (NVDA), told reporters in Singapore that the Chinese tech giant was a „strong” competitor in making AI chips. A Reuters report.

The Shenzhen-based company manufactures smartphones and telecommunications equipment. Surprised the world With the launch of the Mate 60 Pro last year, the latest phone is powered by advanced chips.

Questions have been raised as to how Huawei was able to produce the phone under four years of US restrictions that blocked access to 5G technology.
The breakthrough marks a „milestone” achievement for China, According to researchers, Like Beijing and Washington Locked in a battle over semiconductor technology.

Read more here.

Monday: Earnings from Workday, Zoom and Domino's Pizza. The US Commerce Department reported new home sales in January. European Central Bank President Christine Lagarde delivered remarks.

Tuesday: Revenue from Lowe's, AutoZone, eBay, JM Smucker Company, CAVA Group, Macy's, Urban Outfitters, VIZIO, Bumble, Compass, Eventbrite, Redfin, Virgin Galactic and Beyond Meat. The US Commerce Department releases January figures on new orders for durable goods. S&P Global releases its S&P CoreLogic Gas-Shiller 20-City Home Price Index in December. Fed Vice Chairman for Supervision Michael Barr delivers comments. The Conference Board releases its February Consumer Survey.

Wednesday: Revenue from Salesforce, DJX Companies, Monster Beverage, Baidu, HP, Octa, Paramount Global and Duolingo. The US Commerce Department releases its second estimate of fourth-quarter gross domestic product. Fed officials Raphael Bostick, Susan Collins and John Williams provide comments.

Thursday: Earnings from Anheuser-Busch Inbev, Dell Technologies, Dollar Tree, Best Buy, Birkenstock, GoodRx, Papa John's International and Sweetgreen. The US Commerce Department releases January figures on household spending, income and the Fed's preferred measure of inflation. The U.S. Department of Labor reported the number of new applications for unemployment benefits for the week ended February 24. The National Association of Realtors reports January home sales based on contract signings. Fed officials Raphael Bostic, Austan Goolsbee, Loretta Mester and John Williams provide comments. S&P Global and China's National Bureau of Statistics release surveys in February measuring economic activity in the country's manufacturing sector.

Friday: Revenue from Pearson and FuboTV. The European Union's statistics agency publishes February inflation figures. S&P Global and the Institute for Supply Management release February surveys measuring economic activity in the US manufacturing sector. The University of Michigan releases its final reading of consumer sentiment in February. Fed officials Christopher Waller, Raphael Bostick, Mary Daly and Adriana Kugler provide comments.