Why credit card debt is at an all-time high, while unemployment is at a 50-year low

The Wall Street Journal reported on Tuesday that total credit card debt is at all time high: $930 billion. At the same time, by some measures, the economy is roaring. The unemployment rate, at 3.6%, is at a 50-year low. Job growth has slowed somewhat under President Trump’s administration, but it’s still positive, and wages are rising.

Some people point to the high level of credit card debt as evidence that the economy isn’t doing as well as we think, highlighting the fact that the economic recovery has left a lot of Americans behind.

And it’s certainly true that millions of Americans struggle to make ends meet. 39 million adults make less than $15 per hour: more than a quarter of these low-wage earners are parents. Higher-earning families still struggle with the high costs of childcare, housing, and healthcare, along with student loans. A 2018 Federal Reserve survey found that only 61% of Americans could cover an unexpected expense of $400 without borrowing money, although that’s some improvement since 2013, when the rate was 50%.

But the fact that credit card debt is at an all-time high doesn’t mean the job and wage growth numbers aren’t “real.” In fact, the opposite is true.


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