As night follows day, economic expansions end in recessions. Consumer debt is a part of each chapter. On that note, the consumer credit agencies — Equifax, Experian and TransUnion — are reporting a rise in personal loans over recent months.

Is this a sign of trouble for the U.S. economy, which has been expanding since June 2009, with current levels of record-low unemployment?

Thomas Oppel is the executive vice president for the American Sustainable Business Association. “Short term, an increase in personal loans obviously helps continue to fuel consumer spending,” he told MultiBriefs in an email. Debt-fueled consumer demand has a downside, though.

That trend “raises real questions about future spending capability as those loans come due and, perhaps even more worrisome,” according to Oppel, “about the ability of consumers to meet their debt obligations since so much of this rise is unsecured.” Other assets do not back unsecured loans.

Frank Knapp, who heads the South Carolina Small Business Chamber of Commerce, a 5,000-plus member statewide advocacy organization, casts a cold eye on the rise in personal loans spurring consumer demand for goods and services. “While economists were hailing this as a sign of a healthy economy because consumers were confident,” he told MultiBriefs in an email, “I saw it as consumers trying to keep up with the increased prices for their lifestyle. It was a warning sign for our economy.”

The rise in personal loans points in part to a paradox of the current economic expansion. Heidi Shierholz is a senior economist and director of policy for the Economic Policy Institute in Washington, D.C. “Nominal wages grew 3.0% year-over-year in October, which is slower than expected in an economy where the unemployment rate has been at or below 4.0% for the past 20 months,” according to her. “Wage growth — which was picking up from late 2017 to late 2018 — has been backsliding this year.”

Another metric underscores that record-low unemployment is not boosting employees’ wages as employers compete for new hires. “Current-dollar personal income increased $172.8 billion in the third quarter, compared with an increase of $244.2 billion in the second quarter,” according to the Bureau of Economic Affairs.

Anne Zimmerman is co-chair of Businesses for Responsible Tax Reform, a group of small business owners and organizations, and the founder and owner of Zimmerman & Co. CPAs, an Ohio-based public accounting firm. She spoke with MultiBriefs by phone about other aspects of debt and small businesses.

“When the economy slows, businesses that have taken out personal loans when consumer demand is strong can find themselves in trouble,” she said. According to Zimmerman, one of her clients is struggling under personal loan debt from borrowing during an upswing of customer demand that has weakened.

One thing is certain. Quarter two growth was 2.0% versus 1.9% in the third quarter. That slowdown tends to weaken the consumption that accounts for two-thirds of the U.S. economy. Accordingly, personal loans could prove to be a negative factor for businesses and the customers they serve if the slowdown in growth continues.