Consumer Debt | featured news

There is a dirty little secret about economics writing. The thing that offers the surest path to glory to front page play for a story, to lots of Web traffic, to a pat on the back from editors is doom and gloom. When we can point out something that is awful, whether it is a collapsing job market or rising poverty or skyrocketing gasoline prices, the world seems a whole lot more interested in what we have to say. It's not for nothing they call economics the dismal science.

After a long period of consumer retrenchment, U.S. families have cut their once-out-of-control debt loads down to pre-recession levels, largely removing one major obstacle to a faster economic recovery.

A decrease in the amount owed on mortgages helped drive overall U.S. consumer debt lower in the second quarter, even as Americans kept piling up student loan debt, data showed on Wednesday. Total consumer debt fell 0.5 percent to $11.38 trillion compared to the first three months of the year, the New York Fed said in its quarterly household debt and credit report.

The financial shocks that began in 2007 prompted a lot of Americans to change their free-spending ways, especially when it came to taking on debt. Several years on, some Americans may be reversing course, either by choice or necessity.

Latest signs spur caution optimism. Stock market rising; Americans paying off debt.

Total student loan debt exceeds total credit card debt in this country, with $850 billion outstanding, according to Mark Kantrowitz, publisher ...