Wouldn't Count on Rising Rates Just Yet

The New York Federal Reserve's quarterly consumer-credit survey shows that total U.S. consumer debt declined by $74 billion in third quarter -- but the underlying story is a lot more complicated. According to the survey, mortgage debt dropped by more than $120 billion, while student debt rose by $42 billion and auto debt climbed by $18 billion. Credit-card debt was up $2 billion. At the same time, the savings rate appears to be falling and consumer confidence is rising.

My argument here is that consumers are done deleveraging. Interestingly, this is in sharp contrast to the behavior of businesses, which seem to be increasing their savings rate. What does all this mean?...560 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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