by Dismal-Jellyfish
TLDRS:
- Consumer credit increased at a seasonally adjusted annual rate of 2.4 percent during the second quarter.
- Revolving credit (credit cards) increased at an annual rate of 1.2 percent.
- Nonrevolving credit increased at an annual rate of 2.9 percent.
- In June, consumer credit increased at an annual rate of 2.1 percent.
- Consumer Credit use continues to outpace the Fed’s 2% inflation goal!
- Fed Chair Jerome Powell testified before the U.S. Senate Committee on Banking, Housing, and Urban Affairs, highlighting economic expansion despite moderating GDP growth in the first half of the year.“we do not expect it will be appropriate to reduce the target range for the federal funds rate until we have gained greater confidence that inflation is moving sustainably toward 2 percent. Incoming data for the first quarter of this year did not support such greater confidence.“Second quarter should not give confidence they have it tamed.
- A combination of slower wage growth, higher interest rates, and depleted savings indicate that the headwinds will continue to work against consumers.
- Approximately 9.1% of credit card balances and 8.0% of auto loan balances transitioned into delinquency over the past year, and around 136,000 consumers had a bankruptcy notation added to their credit reports in Q2 2024, up from the previous quarter.
- To fix one end of their mandate (price stability) from the inflation problem they created, the Fed will continue sacrificing employment (the other end of their mandate) to bolster price stability by continuing to hold or even interest rates–causing further stress to businesses and households.
- Reminder, consumer spending is a major factor in the U.S. economy and its GDP, it goes down, companies fail.
- I believe inflation is the match that has been lit that will light the fuse of our rocket.
https://dismal-jellyfish.com/consumer-credit-increases-2-4-in-q2-exceeding-feds-inflation-target/
https://www.federalreserve.gov/releases/g19/current/g19.pdf