American Consumers Try to Lower Debts despite Disturbing Economic Data

Last August 15, the Federal Reserve of New York released a consumer credit and debt analysis. Prior to the release, the federal Bureau of Labor Statistics reported an update on the unemployment rate. Although both reports provide essential information, a comparison of both shows the real picture of the consumers’ situation in the midst of the recession.

The household credit and debt quarterly report consists of different information such as per head debt levels, foreclosures and installment loans. The basis of the report is the data provided by the Consumer Credit Panel of the New York Fed which also randomly samples their data from Equifax credit report.

Despite the high rate of unemployment, the good news is that an increasing number of Americans are trying their best to reduce their debts. This is evident in the following figures: (1) there is a 22.8% decrease of new foreclosures compared to the first quarter rate. (2) The rate of bankruptcies is down by 23.8% compared to second quarter of last year. (3) The number of delinquent credit balances has declined to 15% compared to the previous year. (4) Indebtedness related to non real estate properties reduced to $10 billion, a 9.5% decrease compared to its peak in the last quarter of 2008.

The better news that goes with the good news stated above is that improvements in credit have occurred in spite of the 13.9 million of unemployed individuals. This figure does not include workers who have stopped looking for work because of discouragement. Once the number of discouraged workers is added to the official unemployment number, the total will significantly increase.

In the midst of challenging economic trends, Americans have shown their resiliency to the difficult times by defying data points. While lawmakers are still continuously seeking for ways to cut the debt of the entire nation, every individual are facing their futures with the hope of recovery by taking their own baby steps.


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My name is Peter and I live in Wisconsin. I'm an internet marketer and would like to share my knowledge with the world.

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