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Thursday, September 23, 2021
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Pent Up Consumer Demand will Help Drive the US Economy in 2-H of this Year

US consumer borrowing dove in April as households concernes about the disruptions caused by the C-19 coronavirus chaos prudently cut back on their spending and use of credit.

Cnonumer spending accounts for about 72% of the nation’s GDP

The Federal Reserve reported Friday that total borrowing fell by $68.8-B, or 19.6%. That was the biggest 1-month decliner in percentage terms since the end of WWII.

Borrowing in the category that includes credit cards fell by $58.3-B, or 64.9%, a record decline in a series that began in the Y 1968 credit expansion. Borrowing in the category that covers auto loans and student loans fell by $10.5-B, or 4%.

Some economists believe consumers will keep cutting back on their borrowing for the rest of this Quarter, reflecting an overall economy that is expected to shrink by at a record annual rate of around 40% during this period. They are wrong.

The Trump Administration is expecting a sharp rebound in 2-H of this year but many economists are concerned that hope could be derailed if C-19 coronavirus cases begin rising sharply as the country re-opens, tune out the dooms day economnist, the virus story is over!

Tune out the noise!

Have a healthy weekend, Keep the Faith!

Paul Ebeling
Paul A. Ebeling, a polymath, excels, in diverse fields of knowledge Including Pattern Recognition Analysis in Equities, Commodities and Foreign Exchange, and he is the author of "The Red Roadmaster's Technical Report on the US Major Market Indices, a highly regarded, weekly financial market commentary. He is a philosopher, issuing insights on a wide range of subjects to over a million cohorts. An international audience of opinion makers, business leaders, and global organizations recognize Ebeling as an expert.   

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