The Bigger Impact of Smaller Paychecks

Posted by Kendall Harmon

Households, after all, are far more reliant on paychecks (and government benefits) now than during the credit-fueled boom. Consumer credit as a percentage of personal spending, for example, rose from 18.4% in the early 1990s to a peak of 26.3% in December 2008.

It has since dropped sharply, notes Omair Sharif of RBS Securities. But with the level still at 22.8% as of July, “we’re probably not even halfway through” the household debt-shedding process, he says.

That has two broad implications for consumer spending and, in turn, U.S. growth.

Read it all.

Filed under: * Culture-WatchPsychology* Economics, PoliticsEconomyConsumer/consumer spendingLabor/Labor Unions/Labor MarketPersonal FinanceThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--

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Posted September 30, 2011 at 9:34 am [Printer Friendly] [Print w/ comments]
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