There is an excellent post by Harry Terris from Collections and Credit Risk about recent consumer spending trends you should read.
Now, growth rates in credit card purchases, at 8.8% from the previous year in the third quarter, and durables spending, at 5.6%, have leapfrogged overall consumption growth.
Cardholders have managed this without additional borrowing. The contraction in total credit card loans has slowed, but it was still ongoing at a year-over-year drop of 2% in September, the most recent month available, according to the Federal Reserve.
That suggests that the spending is concentrated among a segment of the population that has been spared from chronic unemployment, whose balance sheets have enjoyed a partial recovery along with the value of their stock investments, and who tend to pay off their credit card balances every month.
You can read his entire post here.
Credit Card Volume Shows Some Life by Steve Rhode
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