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Monday, August 15, 2011

NY Fed Q2 Report on Household Debt and Credit

by Calculated Risk on 8/15/2011 12:15:00 PM

This report shows some minor household credit improvement, but that the pace of deleveraging has slowed.

From the NY Fed: New York Fed’s Quarterly Report on Household Debt and Credit Shows Continued Signs of Healing in Consumer Credit Markets

The Federal Reserve Bank of New York today released its Household Debt and Credit Report for the second quarter of 2011. Consistent with last quarter's findings, the report shows continued signs of healing in the consumer credit markets.
"Outstanding consumer debt remained essentially flat, down just $50 billion, in what was basically a repeat of the previous quarter. This is more evidence that the pace of consumer deleveraging that began in late 2008 has slowed," said Andrew Haughwout, vice president in the Research and Statistics Group at the New York Fed. "During the next few quarters we will gain a better understanding of whether this is a permanent or temporary break in the decline of total outstanding consumer debt."
Here is the Q2 report: Quarterly Report on Household Debt and Credit. Here are two graphs:

Total Household Debt Click on graph for larger image in new window.

The first graph shows aggregate consumer debt decreased slightly in Q2. From the NY Fed:
As of June 30, 2011, total consumer indebtedness was $11.4 trillion, a reduction of $1.08 trillion (8.6%) from its peak level at the close of 2008Q3, and $50 billion (0.4%) below its March 31, 2011 level. Mortgage
balances shown on consumer credit reports fell very slightly ($20 billion or 0.2%) during the quarter; home equity lines of credit (HELOC) balances fell by $20 billion (3.0%). ... Consumer indebtedness excluding mortgage and HELOC balances fell very slightly ($10 billion or about 0.4%) in the quarter.
Delinquency Status The second graph shows the percent of debt in delinquency. The percent of delinquent debt is declining, but what really stands out is the percent of debt 90+ days delinquent (Yellow, orange and red).

From the NY Fed:
Total household delinquency rates declined for the sixth consecutive quarter in 2011Q2. As of June 30, 9.9% of outstanding debt was in some stage of delinquency, compared to 10.5% on March 31 and 11.4% a year ago. About $1.1 trillion of consumer debt is currently delinquent, with $833 billion seriously delinquent (at least 90 days late or “severely derogatory”). Compared to a year ago, both delinquent and seriously delinquent balances have fallen 15%.
There are a number of credit graphs at the NY Fed site.