This data from the fed makes me wonder what is going on with all the headlines suggesting that the economic slowdown is coming from hurting consumers.
Sure, I get the logic: I am levered, I can’t afford my ARM, I can’t afford higher CC rates, so I can’t spend more.
But what does this rapid increase in revolving credit mean? I mean it popped 10% in November which is the most recent data available. Is this all increasing balances? It seems like it has to be the “Christmas shopping” season, which seems relatively strong at least in the sense that the consumer credit market remains open in a way that subprime lending is no longer available…
So does that mean that savings are tapped out and now people are just at the end of their rope?
Whatever it means, it sure doesn’t look pretty for the balance sheets of households across the country, but it sure does seem that people are willing to keep flashing the plastic to get some bling.
Any thoughts are appreciated on this one.