consumer spending

In December consumer credit grew contributing thus to common optimism about the US recovery. According to the data by the Federal Reserve total credit outstanding increased $6.1 billion which is more than twice the $2.3 billion that Wall Street economists had predicted.

"It's encouraging that lenders are at least allowing credit card spending to go up, but also it's not great that the only way that extra consumption can be financed is through credit cards rather than hiring income," said Paul Ashworth, chief U.S. economist at Capital Economics in Toronto.

As the Christmas passed and the stores are removing their decorations customers are about to put aside their wallets again. The sales boom recorded during Thanksgiving and Christmas season was not a sign of consumer spending resurrection, say analysts and shoppers themselves.

"At this point I refuse to put anything on credit. If I don't have the money, I don't buy it," said Jeff McErlain, a Brooklyn, New York, musician shopping at upscale department store Saks on Manhattan's Fifth Avenue on Wednesday.

In December consumers in the United States borrowed less for an 11th consecutive month. Americans contracted their credit card spending while increased borrowing for cars and other products.

This was taken by analysts as a sign that Americans may soon return to spending, a necessary condition for economic recovery.

Tesco PLC's expansion into the U.S. and Asia markets as well as its nascent banking services helped boost the U.K.-based supermarket giant's third-quarter sales amid lingering recessionary conditions in some of its markets.

 Many economists and experts continue their lauding the achievements made to date that moved us forth from where we had been in the crisis. They say that the worst of the US recession is over now and improved reports in jobs, consumer spending and housing are taken as an index of recovery.

 Under the shadow of a still-sluggish economy, many holiday shoppers are embracing healthier money management habits to help keep debt at bay, according to a new survey of 1,000 U.S. adults by USAA. In addition, this back-to-basics approach appears to have many shoppers feeling optimistic about this year’s holiday shopping with nearly half (48 percent) of survey respondents saying that the movie titles “It’s a Wonderful Life” and “Jingle All The Way” best describe their approach to this year’s holiday budget. 

 According to survey of USA TODAY the major of the economists affirms the stock market rally is in a sustainable recovery. If the estimates are correct, we should not be afraid of the repeated recession and fall of the Dow Jones industrial to its March low of 6547.05. The Dow sank nearly 3% Friday to close at 9713 after the government reported consumer spending fell 0.5% in September. Still, the market is expected to rise or fall 10% in the months ahead because of uncertainty about the recovery's strength. In the third quarter the economy showed a healthy 3.5% annual rate growth.

 For the 7th consecutive month American consumers reduced their borrowing in August as US families have been working hard to pay off their previous debts and banks have cut credit card limits.

The fact that Americans are saving more and borrowing less may be a positive factor for the national economy in a long term but it hampers economic recovery as consumer spending makes up 70% of the US economy.