American consumers are not only feeling good... They’re feeling great. They’re borrowing money – and spending it – like tomorrow will never come.
[ZH: In other words, Americans are broke but full of hope...]
On Monday the Federal Reserve released its latest report of consumer credit outstanding. According to the Fed’s bean counters, U.S. consumers racked up $28 billion in November in new credit card debt and in new student, auto, and other non-mortgage loans. This amounted to an 8.8 percent increase in consumer borrowing. It also ran total outstanding consumer debt up to $3.83 trillion.
Perhaps this consumer spending binge will finally propel price inflation, as measured by the personal consumption expenditure (PCE) deflator, up to the Fed’s illusive 2 percent target. Academic economists and central planners consider 2 percent price inflation to be the sweet spot for attaining economic heaven on earth. We have some reservations.
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1 comment:
I'm going to use all the money from the tax reform to pay off my credit cards. How long will it take at $900/year savings to paY off $33,000 at 18%?
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