NEW YORK (TheStreet) -- A report this week by the Urban Institute that analyzed the credit files of 7 million Americans shows why the U.S. economy may not be as strong as yesterday's report from the Commerce Department on second-quarter growth may have indicated.
The government reported that gross domestic product rose at a seasonally adjusted 4% annual rate in the second quarter, compared with a decline of 2.1% in the first quarter, which was revised from a decline of 2.9%.
But the Urban Institute reported that about one-third of adults in the U.S. who have a credit file have a report of debt in collections.
"These adults owe an average of $5,178 (median $1,349). Debt in collections involves a nonmortgage bill -- such as a credit card balance, medical or utility bill-that is more than 180 days past due and has been placed in collections," the report says.
Furthermore, "5.3 percent of people with a credit file have a report of past due debt, indicating they are between 30 and 180 days late on a nonmortgage payment," the report states.
Note that these are people with credit files. The report states that about 22 million adults don't have credit files. That is roughly 9% of the population.
The report says many low-income consumers cannot access traditional credit and may still be delinquent on debt.
So one could argue that more than 40% of adults in the U.S. are delinquent on loans. And that accounts for just non-mortgage debt.