The New York City Economy Tracker is a joint project between Investopedia and , using publicly available data to evaluate the economic heal🐷th of the city across a va🎃riety of metrics.

For the week of November 13, 2023, we’re 🍌looking at how debt is rising the fastest in New York State compared to other states and the U.S. overall.

Debt Is Rising the Most in New York

As the holiday shopping season approaches, debt is rising the fastest in New York compared to neighboring states—and even the country. Per capita debt balances in New York state rose by 4.7% from Q3 ‘22 to ‘23 to an estimated $57,560, according to the latest Household Debt and Credit report from the New York Federal Reserve and Equifax. This increase ꦺwas slightly higher than the 4.3% jump for the country overall, but notably more than the 3% and 1.4% increase in neighboring Pennsylvania and New Jersey, respectively.

Looking at the breakdown of the t⛎ype of debt that increased, credit card debt per capita rose the most from Q3 ‘22 to ‘23 by 13.3% to $3,830. However, auto loan debt in New York state increased by 12.7% to $3,930 in the same time period. Meanwhile, per capita auto loan debt only rose 6.2% in the country overall, an🔜d 8.7% and 3.5% in New Jersey and Pennsylvania, respectively. This jump in auto loan debt alongside credit card debt suggest that households in New York state are not only spending more on revolving accounts for the holidays, but also accruing more debt from bigger purchases like cars. 

Additional survey data from the New York Fed’s Credit Access Survey showed that as of Q2 2023, 14.2% of applicants reported they were rejected for an auto loan over the last 12 months, a sign of both rising interest rates and still inflated vehicle prices. The only othꩵer major per capita debt increases in New York state from last year was mortgages by 4.1%.

New York Has The Most Seriously Delinquent Debt

As of Q3 2023, people in New York ꦍstate also have the largest amount of per capita debt that is currently delinquent by 90 days or more, with an average balance of $1,165. This isᩚᩚᩚᩚᩚᩚ⁤⁤⁤⁤ᩚ⁤⁤⁤⁤ᩚ⁤⁤⁤⁤ᩚ𒀱ᩚᩚᩚ 16.7% more than neighboring New Jersey and 30% more than Pennsylvania. The trending movement over the last year of this debt also shows a major split between New York and surrounding states as well as the country overall.

From Q3 ‘22 to ‘23, debt that is over 90 days delinquent in New York rose by 15% compared to only 2.8% for the U.S. overall. Meanwhile, the same per capita delinquencies actually fell by 0.1% in New Jersey and 10% in Pennsylvania over the same time period. High and increasing seriously delinquent debt levels for New Yorkers is a sign that residents in the state are potentially spending money bey👍ond their means at a higher rate than peers in New Jersey and Pennsylvania.

Inflation-Adjusted Earnings Hav💦e Decline൲d Since Last Year

Along with the increase in both debt and seriously delinquent debt in New York state over the past year has been the decline in inflation-adjusted earnings for those in the New York City metropolitan area. Private sector employees saw their average hourly earnings grow from $37.81 in Oct. ‘22 to $38.09 in Oct. ‘23, according to data from the Bureau of Labor Statistics State and Metro Area Employment, Hours, & Earnings survey.

However this 0.74% increase in earnings was overshadowed by data from the BLS Consumer Price Index showing a 3.48% increase in inflation in the NYC metro area during the same period causing real earnings to actually decline by 2.74%. This decline was effectively even to the Chicago metro area’s real earnings fall of 2.71% during the same period, and notably more than Philadelphia🥂’s decline of 1.76% and L✅os Angeles’ decline of only 0.52%.

Although inflation has been cooling nationwide and 🍬in NYC over the past few months, it is still increasing at a rate that’s higher than earnings growth which has started to stagnate over the past year. This decline in real purchasing power for those in the NYC metro area from last year will make trying to buy the same amount of goods and services during this holiday season more difficult than last year’s.