Consumer Credit Extends Gains in September
Total consumer credit posted another gain of $11.4 billion for September. This follows a larger gain of $18.4 billion in August, bringing two-month growth to $29.8 billion. The trend that has developed over the past several months continued, with non-revolving credit (e.g., auto loans) leading the expansion with a $14.3 billion gain, while revolving credit (credit cards) contracted by $2.9 billion. Revolving credit growth has been stagnant since November 2011 (See Chart); the series has remained positive, just barely, on a year-over-year basis, posting averaging growth of only 0.57% per month (see grey box in chart).
Bloomberg asks Diane Swonk to explain Fed concern over unemployment
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First post here, and just wanted to say the Economics Mind Blog is a great tool for me. It effectively aggregates the information that is directly relevant to the shape of the economy, and does so quickly.
About the deleveraging of debt, this should be looked at as a positive thing. Sure, deleveraging will subtract from economic growth but what is important is that firms and consumers stay in safe leverage levels. We should not be cheering for an increase in revolving debt, to the contrary the fact that it is stagnant should tell us that consumers are more hesitant to feed the type of growth that helped create the housing bubble in the first place.
The real question is, what is the appropriate leverage?