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Each day the Research staff takes a look at recently released economic indicators, addressing what these indicators mean for REALTORS® and their clients. Today’s update highlights consumer credit.
- Non-revolving credit of U.S. consumers increased $9.3 billion in January, according to yesterday’s Federal Reserve report. This boost reflected strong demand for vehicles.
- On the other hand, revolving credit, i.e. credit cards, declined in January by $4.2 billion for the first time since August 2008. In total, seasonally adjusted consumer debt increased $5.0 billion, or a 2.5% annualized rate, in January to $2.412 trillion.
- The experts believe that consumer borrowing will increase more in the coming months as consumers become more confident about the economy and the jobs market. Since the end of 2007 when the recession started to impact more and more households, consumers began borrowing less and saving more. Consumer spending accounts for 70 percent of total economic activity.
- More savings is a healthier long-run trend, though it could hold back short-term economic growth. Higher savings also mean more future home buyers able to make adequate down payments entering the market.
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