Consumer debt increases in Sept. by largest amount since January

Associated Press ^ | 11-07-03

[Brian S]

WASHINGTON - Consumers ratcheted up their borrowing in September by the largest amount since the beginning of the year amid signs that the economy and the job market were picking up.

The Federal Reserve reported Friday that consumers increased their borrowing by a seasonally adjusted $15.1 billion, or at a sizable annual rate of 9.7 percent, from August to September. That pushed up total consumer debt to $1.97 trillion.

[doc30]

That increase in spending and debt was heavily influenced by me: just purchased my first home and am paying for my wedding. </ sarcasm>

[Willie Green]

The Federal Reserve reported Friday that consumers increased their borrowing by a seasonally adjusted $15.1 billion, or at a sizable annual rate of 9.7 percent, from August to September. That pushed up total consumer debt to $1.97 trillion.

Consumers are mere amateurs at chalking up debt.
The Government is much more irresponsible.
They hire professional economists to bury us deeper in debt.

"I am one of those who do not believe that a national debt is a national blessing, but rather a curse to a republic; inasmuch as it is calculated to raise around the administration a moneyed aristocracy dangerous to the liberties of the country."

-- President Andrew Jackson - (1824)

[sourcery]

"Do not meddle in the affairs of Wizards, for they are subtle, and quick to anger!"

Summoning the usual suspects...

[OldBlondBabe]

Geez, I thought it was us. We remodeled the kitchen, bot two new (to us) cars that hubby is refurbishing (one for 16 yr. old son) and now we are entertaining bids for a garage addition and updated electrical service. Glad you're helping tho, we were getting tired of keeping this economy going all by ourselves.

[Brian S]

paying for my wedding

Congratulations on the wedding!!! :)

[Revel]

"The Federal Reserve reported Friday that consumers increased their borrowing by a seasonally adjusted $15.1 billion, or at a
sizable annual rate of 9.7 percent, from August to September.


"The economy grew at a sizzling 7.2 percent annual rate in the July-to-September quarter, the best performance in nearly two
decades, as consumers spent with abandon and businesses ramped up investment. "


This was exactly what I thought when those GDP numbers were released. And here in this article one can see it plain as day. Our so called economic recovery has been "Borrowed".
Wait until the bill comes due.

[sarcasm]

[Huck]

Forget you guys. I bought new living room furniture, new carpeting, a new Fender Telecaster guitar, and a new bed. And all my stuff's paid for. Well, except the living room set, but that's 0% so I will pay it off after 12 months.

[Just another Joe]

Consumer debt increases in Sept. by largest amount since January

All due to the FReepers contributing to the demise of the DemoncRATic party, no doubt.

[waterstraat]

Why is consumer debt increasing, the federal debt increasing, and the balance of trade debt increasing? If more people are not working, the debt should be going down, not up. How is everybody going to pay all this back?

[Willie Green]

Wait until the bill comes due.

We won't have to wait very long:

The new jobs added last month mostly were in lower-paying industries such as retail and temporary employment firms. Average weekly earnings in those sectors are $366 and $318 respectively, said John A. Challenger, chief executive officer of Challenger, Gray and Christmas, an employment research and recruiting firm. The national average is $521 per week." (Source)

Consumers can't afford very much debt on a WalMart wage.

[FITZ]

I think they should measure the success of the economy by how much people are saving instead of how much indebtedness they're living in. I know I'm doing well when I've got a little extra money to put into savings after bills are paid and essentials are purchases. High debt is worse than being broke.

[FITZ]

And none of that stuff is worth anything anymore --- your money is gone and your money for 12 months into the future is gone. 0% interest still means you're in debt --- and for stuff that has no value. It's better to save money, spend what you want AFTER you have the money.

[Huck]

And none of that stuff is worth anything anymore --- your money is gone and your money for 12 months into the future is gone. 0% interest still means you're in debt --- and for stuff that has no value. It's better to save money, spend what you want AFTER you have the money.

What are you talking about? I got new furniture, which brings me a lot of pleasure, which means it is worth much. The money I will use to pay for it is in my possession, earning me money, while I am paying no interest at all for the use of it. Why on earth would I give my money to JC Penney now, when I can use it for free for a whole year, earn more money with it,and then pay no more than I would have paid now???

[Huck]

You get what I am saying? I HAVE the money. And the furniture. And a 0% loan for the furniture for one year. The way I see it, I'd be a dumbass to take my money and fork it over now, when its costing me nothing not to, rather than to hold on to it, since i can earn money with it, and then settle up when its advantageous for me.

[waterstraat]

The new jobs added last month mostly were in lower-paying industries such as retail and temporary employment firms. Average weekly earnings in those sectors are $366 and $318 respectively, said John A. Challenger, chief executive officer of Challenger, Gray and Christmas, an employment research and recruiting firm. The national average is $521 per week."

$318 is not very much, esp for an unemployed IT, engineer, or a factory worker who's job went to china or India.

[joyful1]

Many people I know are haning on by their fingernails.

In some neighborhoods, the "for sale" signs are because of bank foreclosures.

The credit bubble is going to swallow many good people alive.

The only surprise is that this situation is not getting much media play.

[FITZ]

Okay --- that's different if you have the money. But many people don't --- they live in debt. I don't understand the point of this article that things are better if people are taking on more debt ---- people need to be saving money and we should measure the economy not by how much people are living in the red but how much they are living in the black. Especially debts for clothing and furniture and vacations --- money borrowed for something like a house is different because the house can be repossessed and resold if the borrower defaults on the loan --- but with consumer items if the borrower doesn't pay the money is gone for the investors.

[Huck]

I understand your point about debt. Believe me. I am a saver. This past year, I have gone "hog wild" by allowing myself a few rewards, like the guitar. In the past, it was all saved. Even so, every payday, just like grandma taught me, I pay myself first. Yesterday, 1/2 my paycheck went directly into savings. I have now put back into savings the money I took out to buy a used car in may that I paid for in full. So, the way I look at it, NOW the car is paid for, because I borrowed from my own savings to buy it. Just my way of thinking about it.

The thing is, the interest rate policies are designed to incentivize debt. Which of course means it punishes savings. What they do, it seems to me, when they lower interest rates is make it easier for consumers and businesses to borrow, and they make riskier investments more attractive by making conservative savings vehicles very low earners.

Even so, I keep a goodly amount of cash in the bank. It's how I sleep at night. And there can never be enough as far as I am concerned. I like things to be paid for, I like to do without in most cases, though, like I said, I have loosened up a little--my wife wanted the carpet and furniture, I wanted a guitar. But it's all paid for. The money is all there. And even though I have gotten two promotions this year, I am still wearing $10 wal mart khakis to work and doing fine in em. So, the tightwad lives!

Anyway, who cares about me, right? But just a lot of babble to say I agree with you about savings. But the country seems to plod along regardless, doesn't it?