You hear a lot about how companies may pull back on investment due to the fiscal cliff, and that’s clearly an issue, but…
The data suggests that the consumer is a big worry spot.
Today’s consumer credit number came in way weaker than expected, and revolving consumer credit (credit cards) actually shrunk sequentially.
Here’s a chart of the year-over-year change in non-seasonally adjusted revolving credit. As you can see, the year over year growth rate is still positive, but the growth is shrinking fast.
And to drive home the point that this is a trouble spot, here’s a look that same YOY change in consumer credit number vs. the year-over-year growth rate in retail sales. Both are deteriorating.
Again, both remain positive year-over-year. And there is always noise in these sequences. But you can’t be happy if this develops into more of a trend.