Jan customer borrowing impresses economic experts
Consumer borrowing was up $16.2 billion in Jan, according to economists surveyed by Bloomberg. This followed a Dec. where revolving and non-revolving customer credit instances were up by $15.1 billion. Source for this article:
More borrowing with more work opportunities and cheaper financing
There are a variety of reasons why people would start jumping for more credit, but there are a few main ones that have brought on it. The increased accessible of cheaper financing is one main reason, and another is that house values are steady and employment is increasing. About 70 percent of the total economy comes from customer spending, according to economist Terry Sheehan, so that is a good thing.
“There’s been some repair to household balance sheets in the last few years,” said Sheehan. “Consumers certainly have a little more leeway in their borrowing, and with greater employment prospects we have certainly seen a greater ability to borrow.”
The economy is doing much better since the Dow Jones Industrial Average increased to record levels. On top of that, the unemployment rate has decreased considerably.
Better job industry right now
In the week ending March 2, first-time jobless claims fell by 7,000 to 340,000, notes the Labor Department. Economists surveyed by Bloomberg had anticipated a rise in this segment of unemployment statistics, to 355,000. Not only did the reverse occur, but the four-week average decreased to a brand new five-year low.
More jobs translated into more revolving debt, too, as credit card debt increased $106 million in January after a $3.2 billion decrease during Dec. 2012. Non-revolving credit (auto loans, school loans, et al) had increased by $18.3 billion in December, the largest such increase in the category since Nov 2001, when car makers were dangling zero-percent financing to get people to start buying again in the aftermath of 9/11.
Federal school loans increased $25.9 billion in Jan, before seasonal adjustment.