Hi Jim,
Consumer credit was up a whopping 10% in November to the tune of $20 Billion—the biggest monthly gain in ten years!
Some economists interpret that as a sign of growing confidence in the economy!
It seems more likely that when consumers run out of cash, they follow Uncle Sam’s example.
Best regards,
CIGA Black Swan
Stat of the Week: Consumer Credit Up 9.9%
It’s the largest surge since the post-9/11 recovery month of November 2001
Jan 18, 2012, 1:34 pm EST
By Louis Navellier, Editor, Blue Chip Growth
Last Monday, the Federal Reserve announced that November consumer credit surged 9.9%, the fastest monthly increase in 10 years — since the post-9/11 recovery month of November 2001. Credit-card debt rose 8.5%, the biggest monthly jump since 2008, while nonrevolving debt (such as auto loans) rose 10.7%.
This surge in consumer credit should contribute to a rise in fourth-quarter GDP growth since consumer spending represents about 70% of GDP growth. Some economists have now revised their fourth-quarter GDP estimate to an annual pace of 3.4% in the wake of the Fed’s report. In addition, vehicle sales rose 1.5% in December and 8.8% in 2011, while overall retail sales increased by a very healthy 6.5% in 2011.
The sentiment indexes are also turning up. On Tuesday, the National Federation of Independent Business reported that small-business optimism rose to 93.8 in December, up from 92.0 in November. That index has now risen 5.7 points in the last four months. Another good sign is that the Fed’s latest Beige Book survey reported that economic conditions improved in all 12 Fed districts during the last six weeks of 2011. And then, on Friday, the University of Michigan/Reuters’ January preliminary consumer sentiment index rose to 74, up from 69.9 in December — a point higher than economists’ consensus estimate of 73.
