Americans' debt soars near Great Recession levels, even as wealth levels rise: Fed data

• 8.6% of families now have debt payments exceeding 40% of their income, the highest since 2013 and up from 6.5% in 2022
• Wealth inequality persists: families in the top 10% saw median wealth jump 31%, while the bottom 40% of earners experienced decreases
• Americans 75+ saw wealth increase 37% while those under 35 saw a 23% decline, likely due to older individuals benefiting from stock market gains

Summary: U.S. Household Debt Nears Great Recession Levels Despite Rising Wealth

American household debt has climbed to levels not seen since the Great Recession, with over 8% of families now two months or more behind on payments—up from 5% in 2022—marking the highest delinquency rate since the 2010 Federal Reserve Survey of Consumer Finances.

Key Figures:

• Inflation-adjusted average net worth rose 7% to $1.24 million (2022-2025 period)
• Median net worth increased just 2% to $215,900
• 8.6% of families report debt payments exceeding 40% of income, up from 6.5% in 2022—the highest since 2013
• U.S. household spending grew 6.1% year-over-year through August

Wealth Disparity Trends:

Wealth gains heavily favored affluent and older Americans. The top 10% of earners saw median wealth jump 31%, while the bottom 40% experienced declines. Americans 75+ saw wealth surge 37%, compared to a 23% drop for those under 35, largely due to stock market gains benefiting older investors.

Market Implications:

The data reveals a troubling bifurcation in the economy. While consumer spending remains resilient and aggregate wealth has grown, underlying financial stress is building, particularly among younger generations facing tight job markets and rising credit card debt. Gen Z is notably accumulating interest-bearing debt while entering the stock market earlier than previous generations.

Consumer sentiment hit its second-lowest level in history this month per the University of Michigan, reflecting frustration with persistent inflation. The combination of strong spending alongside rising delinquencies and debt burdens suggests consumers may be stretching financial limits, raising concerns about economic sustainability despite superficially positive wealth indicators.