It seems that having less money makes people want to pay off their debts.
U.S. households paid down their debts in the third quarter for the first time since at least 1952, the Federal Reserve reported today, according to MarketWatch. Finally, some good news from the recession.
Hit by a loss of $2.81 trillion in their net wealth, U.S. households' total outstanding debt shrank at an annual rate of 0.8%, from $13.94 trillion to $13.91 trillion as of Sept. 30, the Fed reported.
If you have a lot of time on your hands and enjoy hobbies such as watching paint dry, then you may want to read the Federal Reserve's "Flow of Funds Accounts" report released today for all the juicy details. It's the first decline in household debt ever recorded in the report.
Mortgage debt fell for the first time ever too, at a 2.4% annual rate to $10.54 trillion. Other consumer debts, such as credit cards and auto loans, increased at a 1.2% annual rate in the quarter to $2.6 trillion.
The federal government, however, didn't do its part by lessening its debt. Total U.S. domestic nonfinancial debt increased at a 7.2% annual rate, boosted by a postwar record 39.2% increase in debt taken on by the federal government.
Aaron Crowe is an unemployed journalist in the San Francisco Bay Area. Read about his job search at www.talesofanunemployeddad.blogspot.com