Economy Is Up, But More Americans Have Big Debt

NEW YORK (TheStreet) -- The economy has rebounded from a sour first quarter, posting a 4% rise in the second quarter, according to the Bureau of Economic Analysis and U.S. Commerce Department.

While the Bureau says the 4% figure could be revised downward in late August, when more data roll in from the second quarter, analysts did note that consumers are spending more after a rough winter, and that has helped boost the gross domestic product.

"The increase in real GDP in the second quarter primarily reflected positive contributions from personal consumption expenditures (largely driven by credit card purchases), private inventory investment, exports, nonresidential fixed investment, state and local government spending and residential fixed investment," the BEA reports. "Imports, which are a subtraction in the calculation of GDP, increased."

That all points to continued economic growth, but there are ominous signs that the economy, especially as it relates to consumer spending, may fall under the weight of too much household debt.

According to the Washington, D.C.-based Urban Institute, 35% of Americans own debts and unpaid bills that have been reported to nationwide collection agencies.

Altogether, U.S. consumers owed $5,200 each to creditors as of September, the UI reports. 

Some states really are seeing big upticks in debt ratios. Nevada, for example, has 47% of its adult residents reporting debts with collection agencies. Nevada also has the highest per person average debt, at $7,198.

The Silver State is hardly alone. A dozen additional states, with a heavy emphasis on states in the South, have consumer debt ratios of over 40%. States that reported lower consumer debt problems come from the upper Midwest, with Minnesota, North Dakota and South Dakota in the top tier, all with roughly 20% of residents with collection agency debt.

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