Everybody jumped a bit when June 11 the Federal Reserve came out with a report asserting that the net worth of the average U.S. household fell 40 percent since the crisis. “Yikes” pretty much verbalizes the reaction, whether you are a financial sophisticate or not.

A bit closer to home was the news that credit card balances have fallen as well, with the median balance down 16 percent, from $3,100 in 2007 to $2,600 in 2010. At the same time the median value of debt remained unchanged.

In normal times this could pass for noise in the data, but everybody knows that what the politicians call “the middle class,” and what we at Global Insights call the Credit on the Edge segment, is getting hit harder than the more affluent Credit Worthy segment. The former are still trying to dig themselves out. The latter are saving as best they may, and spending when they can.

It may be hard to find a silver lining in all this–Moody’s Investor Services’ Mark Zandi told the Washington Post that “It’s hard to overstate how serious the collapse in the economy was…We were in free fall”—but the point is, we’re not in free fall anymore.

That’s in large part because the U.S. consumer—both the Credit Worthy and Credit on the Edge—has changed his ways and discovered that credit cards are powerful expense management devices, the difference between long- and short-term borrowing, and how to leverage liquidity with debit cards.

Watch this space over the next two weeks for the latest update on Global Insights analysis of this shift, which began in 2009 and continues to be borne out by numbers like the Fed’s. U.S. consumers continue to make adjustments to their credit portfolios. Global Insights’ updated information should shed some light on this topic.

Topics: Economic Outlook