Household Debt Drop: Sign of Recovery?

U.S. consumers continue to pay down debt. Last quarter, household wealth rose $2.1 trillion. Is this the basis for a strong recovery?

The basis for recovery? U.S. consumers continue to pay down debt. From the Wall Street Journal:

Household debt fell by about 0.5%, the 11th straight quarterly decline. Home mortgage debt fell 1.25% while consumer credit rose 2.0%.

Another Fed report this week showed that consumers added to their non-mortgage debts for the fourth-straight month in January, driven by loans for autos, boats and education. But credit-card debt fell to a new six-year low as consumers continued to pay down debt or default on loans.

Reuters notes that the improvement in household net worth adds up to a total of $2.1 trillion in additional wealth. Not bad for 3 months' work.

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