Despite record piles of debt, Canadians aren’t shying away from borrowing. Numbers obtained from the Bank of Canada (BoC) show that consumer credit is starting to accelerate. According to the BoC, the debt pile is actually growing at the fastest rate since the Great Recession.
Total Consumer Debt Grew By $24.9 Billion
Consumer debt, which is non-mortgage debt held by consumers, hit an all-time high and isn’t showing any signs of slowing down. The total balance of consumer credit at the end of July 2017 stood at $590 billion, representing 28.4% of all debt. This is an increase of 4.4%, just over $24.9 billion dollars more than the same month last year. This is the fastest 12 month climb since December 2010. Remember, this debt total is in addition to mortgages, HELOCs, and reverse mortgages.
Better Dwelling, Source: BoC.
3 Month Trend Is Accelerating
Even more interesting, is what’s been happening with these numbers more recently. The annualized 3 month trend is currently at 6.8%, once again the highest since 2010. This means over the past 3 months, the pace of growth is significantly higher, when compared to the 12 month trend. If that’s still unclear, it means debt is accumulating much faster than normal.
1 Month Trend Was Even Faster
The single month trend was even faster according to the BoC. July’s 1-month growth is a massive 7.9% when annualized. The trend was even higher at chartered banks, which showed a whopping 8.1% growth rate when annualized. Maybe Christmas in July is catching on?
A buttload of media coverage, and warnings from international banks hasn’t seemed to slow down Canadians from borrowing. In fact, they increased the rate at which they were doing it. Curious since things like higher interest rates are technically support to cool the rate of borrowing, not kick it to a multi-year high.
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