Tags: consumer | debt | us | 2q

Consumer Debt Edged Lower in 2nd Quarter

Monday, 15 Aug 2011 05:57 PM

American household debt fell slightly in the second quarter, though at a slower pace than previously, while demand for credit rose, a New York Federal Reserve report said Monday.

Consumer debt slipped to $11.4 trillion, down 0.4 percent from the first quarter of 2011. Mortgage debt -- which accounts for 71 percent of all consumer debt -- dropped by $20 billion -- a decrease of only 0.2 percent.

Consumer debt has fallen 8.6 percent from its peak of $12.5 trillion in the third quarter of 2008, but its pace has slowed and even reversed in recent quarters.

"This is more evidence that the pace of consumer deleveraging that began in late 2008 has slowed," said Andrew Haughwout, vice president in the Research and Statistics Group at the New York Fed, in a statement.

Non-real estate debt -- on cars, credit cards, tuition and other items -- fell 0.4 percent to $2.28 trillion in the last quarter.

However, the number of open credit card accounts jumped by 10 million, hinting at growing demand for credit. Credit card limits rose 2.1 percent in the second quarter, suggesting banks are more willing to lend.

While economists are pleased with the decrease in consumer debt, most say more spending is necessary to drive a more robust economic recovery.

© 2017 Thomson/Reuters. All rights reserved.

   
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American household debt fell slightly in the second quarter, though at a slower pace than previously, while demand for credit rose, a New York Federal Reserve report said Monday.Consumer debt slipped to $11.4 trillion, down 0.4 percent from the first quarter of 2011....
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Monday, 15 Aug 2011 05:57 PM
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