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.
I can always use your help. If you have a tip or information you want to share, you can get it to me confidentially if you click here.
