Consumer Credit Increases Sharply
The economy continues to look great on paper. If you’ve seen a spike in demand for consumer credit, you’re not alone. The Federal Reserve reported on Friday that consumer credit increased at an annual rate of 10 percent in March, a sharp rise that confounded the expectations of economists.
The Fed reports that credit unions continued a steady increase of consumer lending so far this year. The amount of consumer credit lent out in March by credit unions increased to $350.6 billion. Incidentally, the Federal Government is estimated to have held $986.2 billion in consumer debt thanks to student loans.
Earlier in the day, the Department of Labor reported total non-farm employment increased in April by 160,000 and that the unemployment rate remained steady at 5%. The jobs performance was a bit lower than economists had expected. The number of long term unemployed declined by 150,000 but continue to make up close to 26% of the unemployed. If you look at the demographic breakdown, the unemployment rate for Hispanics increased to 6.1% in April, while other groups largely remained unchanged. For instance, the unemployment rate for African-Americans remained at 8.8%, more than double that of Whites (4.3%).
I had some family over last night and we were all talking about how the economy just doesn’t seem as strong as the statistics say it is. I find it hard to believe that a truly healthy economy would be fertile ground for the nostrums offered by Mr. Sanders and Mr. Trump. And, how many of you are seeing members as anxious to borrow money as they were in previous economic upswings? Perhaps Friday’s consumer credit report is a turning point. Or maybe just another blip in the more general economic malaise.