One Nation, Over Charged
American consumers continue to post historic highs in household-debt holdings, both in absolute terms and relative to income. Despite the record indebtedness, most Americans are keeping up with their monthly payments and are still borrowing. However, the household saving rate has been negative for five consecutive quarters, after falling below zero in the second quarter of 2005 for the first time in the history of the data. Rising interest rates, ongoing high gasoline prices, and the recent slowdown in the job market also hint at weakness around the bend.
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