Just a little point to worry about for a Monday….All of this talk of consumer borrowing being up a ton in November doesn’t sound like a good thing to me.  Most of what I’ve seen on this topic talks about it as a sign of economic recovery.

That could be.  I do believe a certain segment of people (the gainfully employed) are making more money now than they did several years ago and consumer debt certainly did go down for a few years.  So you can make the case that this is normal and a sign that we are headed for solid economic recovery.  Consumers using credit to juice the economy.

However, it feels more like consumers still addicted to spending more than they should.  A re-inflating of the bubble or attempt to keep the bubble somewhat inflated.  Something to keep in mind is how big a bubble this was and how long it really takes to work through that and bring things back to normal.  I’m not counting on booming economic times for a long time to come.  If this is a re-inflation or partial re-inflation of the bubble, it will just make it a much longer road.

Todd Kmiec

Todd Kmiec and Associates


Views: 82

Comment by Tim Spagnola on January 10, 2012 at 3:27pm

I agree with the points you make Todd. A wait and see approach is important even with signs looking encouraging. Might be silly, but do you factor in holiday spending at all into the mix here?

Comment by Todd Kmiec on January 10, 2012 at 3:36pm

Tim, yes I think holiday spending is a factor.  Ramp up in revolving credit in November.  Doesn't sound like the smart money crowd.


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