Consumer Credit continues downward trend
Consumer Credit outstanding fell $14.8b in Sept seasonally adjusted, almost $5b more than expected and marks the 11th month in the past 12 of declines. At $2.456T outstanding, it is 4.9% below the record high in July ‘08. After a flat reading in Aug, (didn’t fall b/c of the CARS program), non revolving debt outstanding fell by $4.9B. Revolving (mostly credit cards) balances outstanding fell by $9.9B. To fully put into perspective today’s data, look at the current level of consumer credit (doesn’t include mortgages, the biggest chunk of consumer credit) relative to GDP. As of Q3, it totaled 17.2% of GDP vs 17.8% at the end of ‘08 , 16.9% at year end ‘00, 15.1% at year end ‘95, 13.8% at year end ‘90 and 11.7% at year end ‘82 just as that economic expansion began.
November 7th, 2009 at 8:01 am
http://www.nytimes.com/2009/11/07/business/economy/07econ.html?_r=1
Broader Measure of Unemployment Stands at 17.5%
“For all the pain caused by the Great Recession, the job market still was not in as bad shape as it had been during the depths of the early 1980s recession — until now.
UnemploymentWith the release of the jobs report on Friday, the broadest measure of unemployment and underemployment tracked by the Labor Department has reached its highest level in decades. If statistics went back so far, the measure would almost certainly be at its highest level since the Great Depression.”
…So if 11.7% was the credit level before the 1982 expansion, then the consumer is already tapped out and will not be available to go further into debt to salvage our bacon in this recession. So some have speculated that although recessions are ended by the return of the consumer, this time we’ll have to depend on business expansion….uh huh…..
time to pop some more popcorn…