US Consumer Debt Falls For The 5th Consecutive Month
On Friday the Federal Reserve has reported US consumers are no longer consuming. For the fifth consecutive month consumer debt fell, by $10.3 B. US consumer debt is estimated at $2.5 T. Analysts expected a $4.7 B reduction.
Outstanding U.S. consumer debt fell $10.3 billion, or 4.9% at an annual rate, to $2.5 trillion, the Federal Reserve said Friday. That's a much steeper cut than the $4.7 billion analysts expected, according to Thomson Reuters.
The reduction in debt is attributed to consumer sentiment, as well as compromised personal fiances due to the stock market bust. The US savings rate increased by 5.2% in Q2. While responsible consumption decreases the likelihood of economic booms and busts, a large decrease in consumer spending will stall economic recovery.
Market indicators have been labeled as a mix bag. Each giving different signals of recession and recovery. Today the US unemployment rate decreased to 9.4%, a positive sign for the US. These confounding results will continue to plague investors during Q3.