Economy Watch: Consumer Debt Edges Up
- Feb 08, 2011
February 8, 2011
By Dees Stribling, Contributing Editor
U.S. consumers pried their credit cards out of their wallets and pocketbooks for some extra use in December, according to the Federal Reserve, which reported that credit card spending was up during that month, the first monthly increase in more than two years. The total amount of credit card debt was up $2.3 billion in December, a 3.5 percent annualized rate increase.
Total consumer debt was up at an annualized 3 percent during the same month, with improved auto sales helping to drive the non-revolving part of consumer debt. For the entire year 2010, however, total consumer debt dropped 1.6 percent, after a decline of 4.4 percent in 2009, the Fed added.
Before 2009, there had been only two other years in which U.S. consumer debt dropped since the Fed started tracking back in 1942. One was in 1943, when presumably some of that money went to buy war bonds. The next drop was in 1991, which was considered a steep recession at the time, though not so bad in hindsight.
Americans to Hit the Road More This Year
Travelocity reported that, according to a recent survey it conducted, Americans are planning more travel this year than in 2010, a trend that will benefit airlines but also hotels and other hospitality properties. Some 35 percent of the 1,403 survey respondents planned more travel in 2011 compared with last year. Only 5 percent said they would travel less.
Only 1 percent said they weren’t going anywhere this year, down from 4 percent last year. More than 25 percent of the respondents said they planned to spend $2,000 or more for travel in 2011, up from 20 percent offering that figure last year. Some of that increased spending will be necessary to get anywhere at all as fuel prices go up. Air fares, for example, are up about 8 percent compared with last year, noted Travelocity, most of which will pay for jet fuel.
Some money-saving travel strategies are still in vogue, the report added, such as booking package trips. Some 70 percent of respondents said they would consider such an option. Far fewer, about 10 percent, are interested in booking a mystery hotel in return for a deep discount, as sites like Priceline offer.
Employment Trends Index Up
The Conference Board said that its Employment Trends Index increased in January for the fourth consecutive month. The index now stands at 100.5, up a modest amount from December’s revised figure of 100.3. The index is up 7 percent from a year ago.
Is that good? (A question that seems to pop up with every employment statistic these days.) The Conference Board posited that it is.
“Despite anemic job gains in January, the Employment Trends Index suggests that employment growth is poised to accelerate,” said Gad Levanon, associate director of macroeconomic research for the organization, in a statement. “Both ‘hard’ economic data as well as confidence measures have improved, and since employment growth typically lags, we expect larger numbers of jobs to be added back into the economy in the coming months.”
Wall Street ended in positive territory on Monday, perhaps buoyed by President Obama’s pep talk at the U.S. Chamber of Commerce, or maybe the Packers’ win, but in any case the Dow Jones Industrial Average gained 69.48 points, or 0.57 percent. The S&P 500 was up 0.62 percent and the Nasdaq advanced 0.53 percent.