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by washedup 700 days ago
There are a lot of interesting details embedded in this number, specifically how strong consumer spending was.

I still have concerns about dwindling savings and increasing credit balances, as well as historically high APRs, but will worry about that another day.
2 comments
vidanay 700 days ago
> historically high APRs

Interest rates are NOT historically high. In fact they are basically right at "average". The rates for the last five years were historically LOW.

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jeffbee 700 days ago
I think credit card APRs specifically are off the charts. Other forms of credit (mortgages etc) not so much. Credit card issuers are commanding a 15% margin over prime rate, while charge-off i.e. the risk to the credit issuer is around 3%, near all-time lows. In other words credit issuers are raking in record unearned profits.

This FRED series only goes back 30 years but if you look at the Fed Statistical Abstract consumer credit tables, APRs in 1985 were < 19% and in 1980 were < 18% so 21% and higher are very exceptional.

https://fred.stlouisfed.org/series/TERMCBCCALLNS

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washedup 700 days ago
Credit Card APRs, specifically, is what I was mentioning. They are historically high.
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vidanay 700 days ago
Holy shit...I hadn't realized credit card rates have become that high!
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toomuchtodo 700 days ago
Consumer is tapped out, economy is flashing yellow warning light and the Fed needs to cut now. Lots of spending currently being driven by Boomers running off of assets and paying cash (~40% of consumer spending), but there is only so much of that. Per the Sahm rule and rising unemployment, we are approaching recession territory and the potential for a self reinforcing consumer demand destruction spiral (people lose jobs, pull back spending, more people lose jobs, even more spending gets pulled back, and so forth).

https://www.bloomberg.com/news/articles/2024-07-24/share-of-... | https://archive.today/l6ryx

https://www.philadelphiafed.org/surveys-and-data/2024-q1-lar...

https://www.bloomberg.com/opinion/articles/2024-07-24/the-fe... | https://archive.today/xcJP5

https://fred.stlouisfed.org/series/SAHMREALTIME

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washedup 700 days ago
Thanks for theses - I will read! I agree there are still a lot of metrics pointing in the wrong direction.
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infotapeworm 700 days ago
Was about to link some of these. The feds own data certainly does not indicate a "healthy" market.

The fed also changed their own metric for inflation. It's a political play.

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