Economic Roundup: Feb 21, 2011
| Consumer credit topped last week’s financial headlines, with the Federal Reserve’s figures for December coming in at nearly triple analysts’ expectations for the month. While experts had expected December’s consumer credit to ring in at roughly $2.5 billion over November, it jumped a whopping $6.1 billion, bringing the total amount of consumer debt to $2.4 trillion. |
| Both revolving debt, such as credit cards, and non-revolving debt, such as car loans, saw spikes during the month. Non-revolving debt went from $1.608 trillion in November to $1.611 in December, and revolving debt saw a 2.5 percent increase from November’s $807.2 billion to $826.6 billion in December, marking the first increase in revolving debt since 2008. This represented, most likely, an increased willingness on the part of previously frugal consumers to open the purse strings during December’s holiday season, John Silvia, chief economist for Wells Fargo, told The Huffington Post. “You’re probably not going to get the kind of boom in consumer spending that you saw three or four years ago. But clearly over this period of time, consumers are getting back to something more normal.” Silvia added, “My sense is that that willingness to spend is there, but not to the extent it was there in 2006 and 2007.” Matching December’s encouraging credit news was the Employment and Training Administration’s initial jobless claims figures for the week ending February 5, which also outpaced analysts’ expectations. While the experts had predicted that jobless claims for the week would total 410,000, the administration reported that the advance figure for seasonally adjusted initial claims was actually 383,000, a decrease of 36,000 from the previous week’s revised figure of 419,000. This was the lowest level since July 2008. The four-week moving average was 415,500, a decrease of 16,000 from the previous week’s revised average of 431,500. The administration also reported that the total advance number for seasonally adjusted insured unemployment during the week ending January 29 was 3,888,000, a decrease of 47,000 from the preceding week’s revised level of 3,935,000. The four-week moving average was 3,932,250, an increase of 250 from the preceding week’s revised average of 3,932,000. “This report represents clear evidence that the underlying downward trend in claims remains in place,” said Ian Shepherdson, chief U.S. economist at High Frequency Economics, in a public statement. “It is just not possible for claims to fall this far and not see some beneficial effect in payrolls. After the weather-affected January report, we think February payrolls will rise by about 250,000.” Next week’s financial news kicks off Tuesday with January’s retail sales data, as well as export and import prices for January from the Census Bureau. The Bureau will also release figures for December’s business inventories later that day. Wednesday, the Bureau will continue with January’s housing permit data as well as that month’s housing construction starts. The Federal Reserve follows with its industrial production and capacity utilization report for January. The Bureau of Labor Statistics will close up Wednesday’s data by releasing the producer price index for January, and will quickly follow up on Thursday with January’s consumer price index. Thursday wraps up the week’s financial headlines with initial jobless claims for this week from the Employment and Training Administration, as well as January’s Leading Economic Indicators from The Conference Board. |
Related posts:
- Economic Roundup: August 1, 2011
- Economic Roundup: Dec. 6, 2010
- What’s Ahead For Mortgage Rates This Week : May 16, 2011
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