As we approach the critical holiday shopping season, retailers can bag some cautious optimism based on the following two charts:
So consumer expenditures continue to rise and after a bumpy spring and summer, consumer confidence is rising again. And, yes, those per-capita numbers include the 1 percent and you.
This is, of course, not the entire story. Joblessness remains high. So does job insecurity. And average American household is about where it stood in 1989.
Debt is another question. According to the Federal Reserve Bank of New York, overall consumer debt in the third quarter was 11 percent below its third-quarter 2008 peak of $12.68 trillion. Credit-card debt rose only $4 billion in the quarter and has fallen substantially from its pre-recession levels.
At the same time, increases in mortgage balances, student loans and auto loans were the big drivers behind a rise in outstanding consumer debt to $127 billion from the previous quarter. A Fed researcher said it marked “a turning point in the deleveraging cycle.”
So Americans want to spend again, whether their wages are increasing or not.
And Don’t Miss: Technology didn’t kill middle-class jobs, public policy did | Dean Baker/The Guardian
Today’s Econ Haiku:
The East China Sea
Heats up as Tehran cools down
Swim while you can, Dow