In an encouraging sign for the economy, U.S. consumers increased their debt in January for the first time in a year, just the latest hint that household demand may be on an upswing.
Although the economy has picked up steam lately, many economists don't believe it will be on a sustainable path unless consumers restart their spending.
This wasn't too big a surprise following last week's downturn in savings (paying down debt counts as savings), but maybe we should not be counting out the consumer in the short run. We shall soon see... later this week we get February's retail sales figure.
Source: Federal Reserve
Jake,
ReplyDeleteI'm glad you posted this. As I have been saying all along, the deleveraging we have sen was mainly a result of the decrease in nominal GDP. When you look at Debt to GDP numbers, they just never really went down that much.
Deleveraging really hasn't begun in earnest...yet.
If they have not (delevered) by now I cannot imagine what the catalyst would be. I think the banks have been on best behavior for a year but with the year long bull celebration in full effect tomorrow maybe the time is near for the big reflation bubble to start.
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