According to a new report released by the Federal Reserve Bank of New York, total consumer indebtedness was $11.5 trillion (as of March 31, 2011) — a reduction of $1.03 trillion (8.2%) from its peak level in September 2008.
However, consumer indebtedness was *up* $33 billion from just 3 months earlier in December 2010.
Some people feel that this recent increase is a sign that our economy is on the mend because people are now spending again and taking on more debt.
Other people argue just the opposite. Their contention is that a rise in consumer debt simply validates that the economy is *not* improving and people are taking on more debt because they don’t have sufficient funds to pay down their debt.
Who really knows what the data truly means? I’m just relaying the facts. You can interpret it however you wish.
Some other interesting trends and statistics from the report include:
- About $1.2 trillion of consumer debt remains delinquent, with $890 billion being at least 90 days or more past due. Compared to a year ago, the percentage of consumer debt that is delinquent has fallen 15%.
- Data for Arizona, California, Florida and Nevada continue to indicate higher than average delinquency and foreclosure rates.
- The total number of open credit cards is 24% lower than its 2008 peak. The balances on those cards are nearly 20% less than what they were at the end of 2008.
- In 2001, the percentage of consumers that had an account in collection was 8%. In 2011 that figure is up to 14%.
For additional analysis:
Consumer Debt Stops Declining After Nine Consecutive Quarters