Tag Archives: Consumer Confidence

More Loans Reflect Consumer Confidence on the Rise

Economy, , , ,
Consumers Using their Cards More

Consumer confidence in the US economy may be rising, if increasing use of credit cards and other forms of borrowing is any indication.

More Car and College Loans

October saw consumers borrowing more for the second straight month taking more loans to buy more cars and to pay college fees. They seem to be charging more as well to their credit cards. The increase in buying points to the chance that consumers are more comfortable with the economy and are willing to spend more in expectation of the coming holiday season.

Borrowing Going Up!

The Federal Reserve announced on Wednesday that consumer borrowing went up by $7.6 billion. The gains of September and October reversed what had been a continuing steep decline in borrowing since August, when it fell by its largest amount in 16 months.

Unemployment Coming Down

There are other signs of an improved overall economy in the US. In November the unemployment rate went down to 8.6%, its lowest in two and a half years. There have also been 100,000 more jobs generated in the last five consecutive months, the first time that has happened since April 2006.

The borrowing report of the Federal Reserve includes car loans, student loans and credit cards. It does not include, home equity loans, mortgages and other loans which are connected to real estate transactions.

Can Consumers Keep Buying

Consumerism,

Consumer Confidence PlungesTwo contradictory reports seem to confuse the markets this past week.  One showed that consumer confidence is way down, yet the other showed July retail sales jumping 0.5 %. The second report seem to shine a ray of hope on the abysmal state of the US economy, yet this ray of hope is nothing more than an illusion.  Sales are up despite a lack of money and jobs, because the human psyche especially in America is to spend money when you don’t have it in order to feel like you have money.  This has always been the case.  At first consumers tighten up and then they let loose a little in order reconfirm their “stability.”

Consumer “malaise shopping” coupled with the vacation season has created an illusory statistic.  If retail sales were truly expressing a positive trend then consumer confidence wouldn’t have plunged to 54.9 from 63.7 in July, the lowest its been in 3 decades.  If consumer confidence remains low then relying consumers to lift retail numbers in the future seems to be a poor strategy to rely on.