It’s Friday and that means it’s time to review the latest economic data and identify which pockets of the economy are heating up and which are slowing down. Don’t worry about catching every headline and every report throughout the week—I recap all of the most important news impacting your wealth right here every Friday. Let’s take a look at this week’s big headlines…
Consumer Credit Report
On Tuesday, the Federal Reserve Board of Governors released September’s Consumer Credit Report. Headline consumer credit grew $20.8 billion to a seasonally adjusted $3.79 billion in September, higher than the expected gain of $17.4 billion. This is the largest pickup in consumer credit since November 2016.
This gain was largely due to non-revolving credit being higher than usual, rising at an annual rate of 6.3%. Non-revolving credit covers loans for cars and education, and economists were expecting an increase as consumers continue to replace vehicles after the hurricanes in Florida and Texas. Revolving credit, comprised of mostly credit card loans, also rose at an annual rate of 7.7%.
Though September’s numbers were higher than anticipated, industry analysts find that headline growth of consumer credit is continuing to slow down over the long run, particularly due to a decline in student loan borrowing.
Thursday’s wholesale inventories report from the Commerce Department was in line with expectations. Inventories rose 0.3% in September, which is exactly what economists were calling for. Wholesale auto sales, which surged in August by 4.4%, moderated with a 0.7% increase in September. At the current pace, wholesalers would need 1.27 months to clear their inventory, down from 1.28 months in August.
Consumer Sentiment Index
According to the University of Michigan’s Friday report, the consumer sentiment index fell in early November to 97.8, down from 100.7 in October. November’s preliminary result is just shy of the 100.9 estimate that economists were expecting. As the second-highest level so far this year, this was clearly a strong report. According to chief economist Richard Curtin, consumer sentiment has tapered off slightly due to concerns about year-ahead inflation and rising interest rates.
That’s all I have for you this week. I’ll be in touch again next week with the latest ratings updates out of Portfolio Grader.
Have a great weekend,