Less Debt for American Consumers

For the 5th month in a row, American consumers cut down on the amount of debt that they owe. Considering that unemployment is high, home values are low and the stock market is still a question mark, it isn’t too surprising to learn that consumers have decided to save more, pay down their debt and spend less.

Consumer debt in the United States is at approximately $2.5 trillion, which represents a drop of more than $10 billion. This statistic was released by the Federal Reserve on Friday and are the numbers for June.

While trimming $10 billion off of $2.5 trillion isn’t a huge jump, it’s more than double what most experts were expecting.

Ironically enough, the fact that American consumers are now saving more at the moment may prolong the current economic downturn. Without spending, companies will struggle to flourish and could result in the unemployment rate taking years upon years to return to normal levels.

Americans are saving their pennies (Image: Flickr)