first decline in household debt ever recorded

Flow of Funds Accounts
of the United States

http://www.federalreserve.gov/releases/z1/Current/z1.pdf

As of Sept. 30, households’ total outstanding debt shrank at an annualized rate of 0.8% from $13.94 trillion to $13.91 trillion, the Fed said in its quarterly flow of funds report. It’s the first decline in household debt ever recorded in the report.
Households paid off more mortgage debt than they took on for the first time on record. Mortgage debt fell at a 2.4% annual rate to $10.54 trillion.

 

Is the Bottom Line that those with a current mortgage continued to [slowly] pay down principal, but new mortgages were few and far between?

 

Sounds about spot on. New debt is not being issued as fast as old debt is being paid down.

I'm just afraid of the auto-loan and credit card tsunami coming down the road.

 

Foreclosures mean fewer points in the dataset. The weak are being shaken out.

 

Household debt contracted at an annual rate of ¾ percent in the third quarter, after having posted a
small increase in the previous quarter. In the third quarter, home mortgage debt decreased at an annual rate of 2½ percent, and consumer credit rose only at an annual rate of 1¼ percent.

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Household net worth—the difference between the value of assets and liabilities—was an estimated $56.5 trillion at the end of the third quarter of 2008, $2.8 trillion dollars less than in the preceding quarter.


Someone please explain.

Osorico

 

I will interpret the data as the sheeple have more common sense than the Gubmint.

Private debt shrinks while Gubmint debt goes crazy.