[OPE] US consumer expenditure

From: Jurriaan Bendien <adsl675281@telfort.nl>
Date: Mon Sep 21 2009 - 15:47:42 EDT

U.S. mortgage delinquencies set record

Reuters Mon Sep 21, 2009

Among U.S. homeowners with mortgages, a record 7.58 percent were at least 30
days late on payments in August, up from 7.32 percent in July, according to
the data obtained exclusively by Reuters. (...) The rate of subprime
mortgage delinquencies now tops 41 percent, up from about 39 percent in each
of the prior five months. (...) The proportion of credit card accounts at
least 60 days past due was down in August for the third straight month,
while subprime card delinquencies also fell. That improvement in delinquency
rates partly reflects risk-aversion among issuers, which have cut the number
of cards by 82 million, or 19 percent, over the past year, while slashing
credit limits by $721 billion, to about $3.6 trillion. The number of new
cards being issued is down even more dramatically. In June, 2.6 million new
cards were issued, compared with 4.7 million a year earlier. (...) "The data
from August further confirms that we're witnessing a dramatic change in
consumer habits," said Dann Adams, president of Equifax's Consumer
Information Solutions group.Total consumer debt is down more than $300
billion, or almost 3 percent, from its peak in September 2008, Adams said,
while the savings rate is nearing 5 percent, "a level we haven't seen in
years." http://www.reuters.com/article/newsOne/idUSTRE58K29E20090921

How can a national economy continue to grow, when its own citizens earn
less, own less, spend less, borrow less, pay less tax, and save more money?
As I have argued in previous years, the answer cannot be reduced to one
factor, but surely what ranks as one of the main possibilities other than
credit-creation is "export-led development". In that sense, I imagine the
Fed isn't particularly worried by the weak dollar. This means, not less
globalization, but more globalization, even if critical parts of the economy
are shielded from foreign competition.


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Received on Mon Sep 21 15:51:40 2009

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