Economic News in Review Greenville SC
Here is last week’s Economic News in Review Greenville SC.
Consumer credit grew at a slower pace, but hit a historic high, while lay-offs tumbled and wholesale inventories grew slightly.
Consumer Credit
Consumer borrowing performance in August was a matter of perspective. On one hand, consumer borrowing saw slower-than-expected growth in August, rising by its slowest pace in six months. On the other hand, the total amount of borrowing in August still managed to set a record high. Altogether, consumer borrowing hit a historic new high of $3.47 trillion in August, which was 5.6 percent higher than July, according to data released by the Federal Reserve last week.
Revolving debt, such as credit cards, increased 5.3 percent to hit $918.5 billion for the month. Non-revolving debt, such as car or student loans, grew by 5.7 percent in August to $2.55 trillion.
Give that consumer spending constitutes roughly 70 percent of the U.S. economy, consumer credit is a closely watched figure. The more that U.S. consumers are willing to take on debt, the more likely that debt will be used to help fuel spending.
Initial Jobless Claims
After a notable climb the week before, lay-offs took a similarly sized tumble to a 42-year low. First-time claims for unemployment benefits filed by the recently unemployed during the week ending October 3 tumbled 263,000, a drop of 13,000 claims from the preceding week’s total of 276,000, the Employment and Training Administration reported last week. Analysts had expected the week’s totals to ring in at roughly 275,000 claims.
Not only was the weekly total a sizable low, but it marked the 31st straight week that initial claims had kept below the 300,000-claim mark, which economists generally agree indicates a growing job market.
“New and continuing claims suggest the job market continues to do well and the economy is nearing full employment,” Ryan Sweet of Moody’s Analytics told wire service Agence France-Presse.
The four-week moving average — considered a more reliable measure of the more mercurial weekly initial claims data — dropped 267,500 claims, a decline of 3,000 from the prior week’s average of 270,500.
Wholesale Inventories
Wholesale inventories rose 0.1 percent in August to hit $583.9 billion, and were up 4.1 percent compared to August 2014, the Census Bureau reported last week. Key growth categories included durable goods, which were up 0.3 percent, and computer and computer peripheral equipment and software, which grew 1.9 percent.
Wholesale inventories are an important economic indicator, because they represent how much growth wholesalers expect to see from their customers in the retail sector. Their stockpiles represent anticipated consumer spending in the near future.
Meanwhile, sales for wholesalers dipped to $445.4 billion in August, which was down 1 percent from July and 4.7 percent below the August 2014 level. This put the August inventories-to-sales ratio for wholesalers at 1.31; the August 2014 ratio was 1.20.
Economic News in Review Greenville SC
Have a Big day,
Randy
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