Every third year the Federal Reserve issues a Report on Consumer Finances, and the most recent report, released Oct. 9, is eye-opening. First reports in the media, announcing that income inequality in the United States had lessened somewhat from 2023-2025, were misleading; the more important measure of wealth inequality worsened during those years. Wealth assets owned by the top 10% of households grew by 31%; of the median income earners, by 2%; and wealth owned by the bottom third of households declined.

And linked to that wealth inequality by borrowers’ interest rates and other factors, the portion of households behind on their debts leaped up from 12% in 2023, to a shocking 20% at the end of 2025. Those delinquent on debt by 60 days or more rose from 5% to 8%. Households with debt payment-to-total-income ratios above 40%, rose from 6.5% to 8.6%.