WASHINGTON, Aug. 17 (Xinhua) -- U.S. household debt dropped in the second quarter of 2010, the seventh quarterly decline in a row, reflecting an ongoing process of deleveraging as households try to repair their battered balance sheets, the Federal Reserve Bank of New York reported Tuesday.
As of the end of June, total consumer indebtedness was 11.7 trillion U.S. dollars, down 6.5 percent from its peak level in the third quarter of 2008, and a decline of 1.5 percent from the previous quarter, the bank said in its quarterly report on household debt and credit.
The report came at a time when households are rebuilding their balance sheets that were shattered during the financial crisis amid falling home and stock prices. Consumers are now more inclined to use their paychecks to trim debt or save for future use, instead of spending away, as shown in recent economic data.
Consumer spending, which accounts for about 70 percent of the overall economy, flattened out in June, while savings rate rose to 6.4 percent, the highest level since June 2009, the Commerce Department reported earlier this month.
As a result of the deleveraging process, total household delinquency rates declined for the first time since early 2006. As of June 30, 11.4 percent of outstanding debt was in some stage of delinquency, compared to 11.9 percent on March 31, according to the New York Fed's report.
Currently about 1.3 trillion dollars of consumer debt is delinquent and 986 billion dollars is seriously delinquent, which is at least 90 days late.
The number of open credit accounts continued to decline, although at a somewhat slower rate, during the second quarter. About 272 million credit accounts were closed in the year ended June, while 161 million accounts were opened, the report showed.