U.S. Household Debt Decreases
Americans continue to struggle with unemployment, rumors of inflation and the potential threat of foreclosures in the housing market.
However, despite the negative news, many Americans have begun to take steps to cut credit card debt, with a recent Federal Reserve Board report showing Americans have also reduced borrowing for the 25th straight month in October.
Those numbers were confirmed by the Federal Reserve Bank of New York's latest quarterly report. Its statistics showed U.S. household debt declined by $110 billion from the end of June to the start of October. The numbers represent an overall 0.9 percent decline.
Paying off debt cost Americans $150 billion in 2009, down from $300 billion annually in 2007, the Fed reported. Among the other positive financial news was a 16 percent drop in new bankruptcy filings from its second quarter study, and a 4.3 percent rise in new mortgages applications.
In spite of the increase in savings and overall debt reduction, most economists think consumer spending needs to recover for the economy to rebound.
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