Credit Card News

Advertising Disclosure

Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from many credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. Credit-Land.com has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » News » Other » Credit-Land Report: U.S. Households Show Up-tick in Wealth

Credit-Land Report: U.S. Households Show Up-tick in Wealth

By
Add to Favorites:
Credit-Land Report: U.S. Households Show Up-tick in Wealth

U.S. household wealth rose by 1.2% to $58.1 trillion during the first quarter of 2011, according to the most recent report by the Federal Reserve. In addition, U.S. households reduced their debt load, making it the 12th consecutive quarter that this has occurred. Consumer credit also rose for the second straight quarter after eight consecutive quarters of declines.


The data showed that the up-tick in wealth came from gains from stocks and other investments while the decline in real estate values continued to plague U.S. wealth formation. Household wealth has still not recovered from its high of $64.2 trillion at the end of 2007 before the collapse of the housing market.


Creditworthiness


The decline in the debt figures reflect sluggish activity in the housing market with mortgages down 3.4%. Foreclosure or mortgage modification also contributed to the decline in overall debt. Nevertheless, some analysts noted that the reduced debt burdens may put consumers in a better financial position to increase borrowing and open new credit accounts. Predominantly, the loans that consumers are drawn to these days are auto loans and student loans. In total, the consumer debt level increased at an annual rate of 2.4%, which is the second straight quarterly increase after decreasing for eight months in a row.


Businesses Borrowing More Too


Companies in the U.S. are borrowing more money too. The Federal Reserve tracks the flow of funds between American businesses, creditors and spending in general. On a quarterly basis, the Fed reports that business debt increased by 4%. Increased borrowing tends to be an indication that consumers and businesses feel that the economy is moving towards stable ground.


At the same time, businesses also reported a record $1.91 trillion in cash. While the large cash balances may indicate apprehension over the economy near-term, it does provide liquidity for growth and acquisitions in the future. At the end of 2004, business cash reserves totaled about $1.27 trillion.


Local and state governments cut their debt by 2.9% in the first quarter after expanding debt by 7.9% in the previous quarter. The federal debt increased by 20.2% during 2010 and grew 7.8% in the first quarter of 2011.

Add to Favorites:

Related News:

Alaska Airlines Expands in Texas Market

By Dar Dowling, Posted: April 24, 2017

Alaska Airlines has its sights set on growing its presence in Texas and will be adding more service into Dallas Love Field to its roster. Continue reading
Hackers Still Hard at Work

By Dar Dowling, Posted: April 21, 2017

Shopping online or with mobile devices is gaining in popularity with consumers, whether they are looking for trending fashion gear or are making summertime travel plans. Continue reading
Consumers Want More from Their Credit Cards

By Dar Dowling, Posted: April 20, 2017

Credit cards are definitely trending with consumers according to a new study by Harris Polls, and they know what benefits they want to come along with their cards, including no annual fees and reduced or waived late fees. Continue reading
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.
You could turn $200 into $400 with Cashback Match™. Get a dollar-for-dollar match of all the cash back you’ve earned at the end of your first year, automatically.
For Excellent, Good Credit
Unlimited 1.5x rewards on every purchase, every day. For every $1 you spend, you earn 1.5x Miles.
For Excellent, Good Credit
No Annual Fee
For Bad Credit