Morning Business Memo:
More Americans are climbing out of debt and a new report gives a pat on the back to consumers. The finding: For the first time in four years, most consumers are no longer in financial distress. “They’ve managed their credit better. People have done a great job of paying down their bills,” says Scott Scredon of the credit counseling group CredAbility. “Credit card delinquencies are at a very low level. Bankruptcies are down.” Fewer homeowners are behind on their mortgages.
Real estate information firm Zillow says the number of homeowners who owe more on their mortgages than their houses are worth fell again in the second quarter. The total dropped by about 400,000. Average home prices rose and fewer properties were lost to foreclosure.
A Pew Research study found that the middle class is worse off than it was a decade ago. The report describes the middle class as suffering its “worst decade in modern history.” Both income and wealth are down. “We’ve never had a decade that we’ve been able to track since World War II where both of those things were true,” Paul Taylor of Pew told ABC News.
If the U.S. economy tanks this fall, problems overseas might be the biggest cause. A new survey by Markit Economics says European services and manufacturing contracted in August for the seventh straight month. “The latest decline in overall output mainly reflected a further marked drop in new orders,” says the Markit report, released this morning. “Incoming new business fell for the 13th consecutive month, although the rate of contraction was less sharp than July.” The report says eurozone export orders fell. And there’s more evidence of a manufacturing slowdown in China. A survey reports a drop in exports this month. Calls are growing for Beijing to do more to stimulate the Chinese economy.
The U.S. Federal Reserve has sent the strongest signal so far that it might be ready to pull the trigger and launch a new bond-buying program. Minutes from the Fed’s most recent meeting give a hint of a new attempt to cut interest rates even further, to encourage more borrowing and spending by business and consumers. The minutes show officials spoke with increased urgency about the need to provide more help for the sputtering economy. The move might be announced next month.