The government reported Thursday that household debt in the third quarter fell for the first time ever. Meanwhile, net worth dropped by the largest amount on record based on data going back to 1951.
Consumer debt fell an annualized $30 billion, or 0.8% in the third quarter to $13.91 trillion, according to the Federal Reserve's flow of funds report.
Americans holding less debt may sound like a positive, but it also means consumers are spending less, as debt has become more expensive and harder to come by.
Furthermore, the U.S. economy has shed 1.9 million jobs so far in 2008.
Consumers watched their net worth fall for the fourth quarter in a row as it dropped by $2.8 trillion, or 4.7%, to $56.5 trillion, dragged down by huge drops in home values and in the stock market. It was the largest decline in the 57-year history of the report.
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