The Federal Reserve released its Flow of Funds report at the end of last week, and this document contained the fact that American household debt increased by 0.25 percent in the fourth quarter of 2011. That's a tiny movement, almost not enough to be detected, yet it may be highly significant nevertheless. It's the first time we've seen any increase in household indebtedness since the second quarter of 2008.
American families borrowed $43 billion in the final three months of 2011. Even in 2008, the last time we saw that number above water, the amount of household debt incurred for the entire year was just $13.7 billion. Americans racked up $170 billion in consumer credit in the fourth quarter alone, which is more than we've seen in any year since before the recession started in 2007.
We watch the consumer confidence numbers pretty carefully to see whether Americans are ready to start spending again, but this provides much more concrete evidence that they are, in fact, confident about this economy. And the fact that so much more money has begun circulating through the system is good news for all of us.
No comments:
Post a Comment