(NNPA)—On Aug. 15, the New York Federal Reserve released an analysis of consumer household debt and credit. A few days earlier the federal Bureau of Labor Statistics announced updated unemployment figures. While each report is informative, comparing both reports reveals a more complete picture of how consumers are financially holding on in this lingering recession.
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The quarterly household debt and credit report includes data on per capita debt levels, installment loans, foreclosures and more. The report is based on data from the New York Fed’s Consumer Credit Panel that also draws upon random sampling from Equifax credit report data.
The good news is that despite high unemployment, more Americans are finding ways to pay down their debts:
•New foreclosures fell 22.8 percent from the first quarter;
•Bankruptcies were down 23.8 percent compared to the second quarter of 2010;
•Both delinquent and seriously delinquent credit balances were down 15 percent compared to last year; and
•Non-real estate indebtedness fell by $10 billion—9.5 percent below its fourth quarter 2008 peak.
Although a drop in new foreclosures sounds encouraging, at least part of this decrease is due to a slow-down on foreclosure actions. Since lenders were accused of “robo-signing” and other illegal foreclosure practices, there has been a slow-down in foreclosure actions as mortgage companies try harder to abide by the law. More information on this specific mortgage issue is available on the Center for Responsible Lending’s web at: www.responsiblelending.org
The real ‘news’ of these and related developments is that small and incremental credit improvements have occurred despite 13.9 million people officially unemployed. If ‘discouraged workers’—people who have stopped actively seeking employment—were to be added to official numbers, unemployment figures would be higher.
And among the unemployed, African-Americans still shoulder a disproportionate burden. Black unemployment—now 15.9 percent—outpaces that of the nation at 9.1 percent. Within the Black community, teenage unemployment of 39.2 percent represents the highest level of all measured groups.
Some economists say that the nation’s economic turnaround will occur when consumer spending increases. Yet with nagging and widespread unemployment and the month of June’s new jobs being the weakest created in nine months, it appears doubtful that consumer spending will speed up anytime soon.
Amid all these disturbing economic trends, somehow the resiliency of America’s people continues to defy data points. While some lawmakers will continue to debate the nation’s debt, elsewhere people are seizing their futures and charting their own economic recovery course in these uneasy times.
In the words of our own Maya Angelou,
“Out of the huts of history’s shame—I rise
Up from a past that’s rooted in pain—I rise
I’m a black ocean, leaping and wide,
Welling and swelling I bear in the tide.
Leaving behind nights of terror and fear—I rise
Into a daybreak that’s wondrously clear—I rise.”
(Charlene Crowell is the Center for Responsible Lending’s communications manager for state policy and outreach. She can be reached at: Charlene.crowell@responsiblelending.org.)