US households are paying back their debts at a glacial pace reports the Federal Reserve.
Household debt peaked at $13.9 trillion in 2008 (with a “T”). Amidst all the deleveraging and pain of the last 18 months, total debt has inched down just a hair, to $13.8 trillion.
At this rate, the US consumer will pay down their debts in another 138 years or so – should go by in a heartbeat!
Until the household balance sheet in America is more under control, it’s hard to picture a sustained economic recovery…at least one that is fueled by the consumer. And since the consumer accounts for 70% of GDP in the US, this seems foreboding to say the least.
Related reading: Deflationary trends appear to be winning.