Businesses and households improved their balance sheets late last year with the help of government support, but some consumers and the smallest businesses continued to struggle, according to a report released on Thursday by the Federal Reserve that highlighted the unenven nature of the economic recovery.
“Vulnerabilities from both business and household debt have declined,” the Fed said in its biannual Financial Stability report. “Even so, many businesses and households remain under considerable strain.” read more
Cash piles and deposits for households on the aggregate nearly doubled in the second half of 2020 to roughly $3 trillion from about $1.6 trillion. Most household borrowing was also concentrated among borrowers with high credit scores, the Fed said.
On the business front, short-term delinquencies “have declined notably since last summer” and long-term delinquencies “ticked down, indicating an improvement in firms’…