In the second quarter U.S. household debt saw its largest increase since early 2008. The increases in debt could help jumpstart consumer spending and provide a boost to the sluggish economy.
New data from the Federal Reserve shows that, in the second quarter, household grew by $39.4 billion to $13 trillion. The increase brings household debt to within $2 trillion of the entire yearly economic output of the U.S., Reuters reported.
The 1.2% increase was only the second increase in 17 consecutive quarters. While higher debt levels can boost growth, unless wages and incomes rise as well any increase in consumption will be short lived, CNBC reported. According to data from the U.S. Census Bureau household incomes fell 1.5% to $50,054 in 2011.
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