Here’s a confession, guys. I’m torn while writing this article. See, consumer credit absolutely jumped from March to April when consumers started taking out loans like crazy (we’re not talking going credit card swipe-happy, we’re talking more like auto and student loans.)
On the one hand, that makes me happy to see, because it shows that the economy is recovering enough so that consumers feel confident in borrowing and spending money again. On the other hand, it makes me nervous, because I don’t want people jumping the gun here. The interest rates are down, so consumers are naturally trying to take advantage of them, but if you’re not in the position to do so, I don’t think you should be pushing it. Here’s what Jeanna Smialek reported for Bloomberg on the topic:
“Consumer borrowing in the U.S. accelerated in April as Americans took out more education and automobile loans.
The $11.1 billion increase in credit followed a revised $8.37 billion increase the previous month that was more than initially reported, Federal Reserve figures showed today in Washington. The median forecast in a Bloomberg survey called for a $12.9 billion gain in April.”
Click here to read the entire Bloomberg article about what is happening right now with consumer spending.
The economy is still in recovery-mode, and unemployment is still down (in fact, down another .01% according to data released by the Labor Department today, according to the above-mentioned Bloomberg article.) Don’t push it guys!! Spend what you can afford, stick to a budget. Otherwise it’s gonna be a tough summer of paying back stuff you can’t afford.