Thread: The strongest economy in the world

Most of increase is credit card debt. The media and "analysts" see this as consumer confidence and a good sign as the US economy if 71% dependent on consumer spending. Why not pay cash? Because people cannot afford to buy it. ? Some spending is for "non-revolving" loans like education and cars. Not sure how to perceive this is 'good, ok, or bad.'

It seems like it's the same cycle of low unemployment - with a lot of low wages - taking on more credit card and auto-loan debt and when a natural downward cycle happens a sizeble percentage of people with fall behind, and then default on the loans. One cannot write off - escape from credit card debt anymore after Congress changed the law in 2005 (which I think is fair).

So, as I've said, IMO, this is another "borrow-lending bubble."

Credit is up $28 billion, trouncing expectations of an $18 billion rise

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People line up for a Black Friday giveaway outside the Mall of America in suburban Minneapolis last year.

The numbers: Consumer borrowing rose in November by the largest monthly amount in 16 years, according to the Federal Reserve on Monday. Total consumer credit increased a solid $28 billion in November to a record seasonally adjusted $3.83 trillion, posting an annual growth rate of 8.8%. Economists had been expecting an $18 billion increase

What happened: Credit-card borrowing powered the increase. Revolving credit, which is mostly made up of credit-card loans, accelerated to an annual rate of 13.3% in November, the fastest pace since last December and well above the 9.9% gain in October. Nonrevolving credit, which covers loans for education and cars, rose at an annual rate of 7.2% in November, the fastest pace since October 2016 and above the 5.3% rate in October. The data excludes mortgage debt.
Big picture: This is the third straight solid monthly gain in consumer borrowing. Economists said holiday-related consumer spending was strong to the end of November, providing a boost for credit-card borrowing. Consumers now seem less reluctant to take on debt, which analysts view as a sign of strengthening consumer confidence.

What are they saying?: “While a bit too soon to call a turn in trend from the slower growth seen since early ‘17, there was strong growth in both cyclically sensitive categories, credit cards and autos. Autos will be important to watch going forward as we see if gains can continue without hurricane-related buying. So too will retail sales — for now November’s advances appear to have been funded with credit cards,” said T.J. Connelly, head of research at Contingentmacro.

Market reaction: The S&P 500 index SPX, +0.13% closed at a record high while the Dow Jones Industrial Average DJIA, +0.41% retreated after moving higher for four straight sessions.

https://www.marketwatch.com/story/co...ars-2018-01-08