The Federal Reserve reports that consumer credit balances are rising by 10.25 percent a year, largely because of growing nonrevolving--that is, mortgage and automobile--debt. Credit card debt was down a bit in June, suggesting that consumers did allocate a goodly chunk of tax refunds to paying down or keeping down their revolving debt. With unemployment staying steady (remember, according to the Bush budget, all this deficit spending is supposed to be producing 300,000 new jobs a month): "The expectation was that this revision would be positive, that we would be looking at a number in excess of 300,000," said Anthony Chan, chief economist at Banc One Investment Advisors.
Christmas spending doesn't look good if the jobs growth doesn't dramatically accelerate. As Brad de Graf points out, when the defense industry grows the rest of the economy tanks.
Posted by Mitch Ratcliffe at October 7, 2003 10:06 PM | TrackBack