Economy Watch: Higher Wages, More Borrowing Bode Well for Economy
- Apr 10, 2017
Two newly released metrics point to a stronger economy, or at least consumers who perceive it to be stronger: wage increases, as reported by the Bureau of Labor Statistics, along with the jobs numbers on Friday, as well was consumer borrowing statistics, which were released by the Federal Reserve on Friday. Wages are up, and confident consumers are borrowing more.
According to the BLS, average hourly earnings for all employees increased by 5 cents to $26.14, following a 7-cent increase in February. Over the last 12 months, average hourly earnings have risen by 68 cents, or 2.7 percent, which is ahead of inflation. In March, average hourly earnings of private-sector production and nonsupervisory employees increased by 4 cents, to $21.90.
Also, according to the Fed, U.S. credit card debt in February totaled more than $1 trillion, as did auto loans and student debt. That’s up 6.2 percent from a year ago and up 0.3 percent compared with January. The February credit card debt totals is also at its highest level since early 2009.
Higher credit card borrowing generally points to a greater willingness to spend money on the smaller consumer items generally bought with credit cards, which tend to be more discretionary than bigger-ticket items. Moreover, missed payments on these kinds of loans are at near record-low levels, though they have been rising a bit in recent months.