Americans are in a tremendous amount of debt. In order to either fund their high standard of living or to cover their day-to-day bills since they live paycheck to paycheck, a substantial number of Americans are in the red.
A chart from the Federal Reserve Bank of St. Louis shows how consumer debt service payments as a percent of disposable personal income has skyrocketed since the first quarter of 2013. As of the fourth quarter of last year, the number stands at more than 5.5 percent.
Here is the chart:
With the average household facing an average debt of $30,000, it should be interesting times when the Federal Reserve eventually raises interest rates, whether it’s this year or in a couple of years.
It’s time to start winding down your debt if you can.
Most of the people I know have increasing debt because their wages have been reduced over the past 5+ years. Many of those households are reduced to single incomes or maybe two part time incomes.But this is never brought into the Feds “justification” for the prevailing conditions of the debt.
Credit cards and payday type loans are now paying for daily living expences, not the “high standard of living” that is defined as the reason.
The recession continues and the financal conditions of the People remains almost abysmial.
Its going to get worse, regardless of what the “Fed” does.