Considering the paltry investment returns in the bond market and real estate, I am surprised that the average consumer has not chosen to continue pay down their credit card debt. Well, the latest report from the Federal Reserve says the consumer is back on the debt reduction track. If you believe that a financially stronger consumer is best strategy for long term economic growth and middle class wealth creation, it is time to celebrate. If you believe that our economy needs a consumer spending spurt to jump start this moribund economy, it is time to cry in your beer. For either outcome you should break out the beers. Heh, heh!
It’s a miss!
Consumer credit only grew $6.5 billion in April.
That’s well below expectations of $11 billion. Furthermore, the month before was revised down from a gain of $21.3 billion to $12.3 billion.
MORE: The full report is here, and one thing that stands out is that revolving credit actually shrunk.
Overall, a pretty punk report.