February 10, 2004

$2 Trillion in Consumer Credit: Chart of the Day

The Fed didn't release in any charts, so I made a crude one on my own. But Friday's consumer credit data released by the Fed are a historical milestone--and a very bad sign. First, the milestone(s) (hat tip to Greg Weldon): * consumer credit was up $33 billion in December, three times the November increase of $9.3 billion * for the entire fourth quarter, consumer credit grew $54 billion, up 35% from the $30 billion expansion in Q3 * in the fourth quarter total consumer credit topped $2 trillion for the first time in the history of the Republic You might have expected that after the stimulus of tax rebates wore off, consumers would hit the plastic again. But this also comes against the backdrop of disinflating incomes. People are making less and borrowing more. Not a healthy scenario for a recovery...particularly when the jobs aren't coming.


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