Unemployment at 9.2%
. The stock market: stagnant. Our national debt load:
sagging like a waterlogged ceiling
. It's been a long time since Americans had good news to read about
their economy. But that just makes
's recent report on U.S. credit trends stand out the brighter by
Thanks in part to homebuyers
reneging on their mortgages
, and in part to a renewed reticence to
, the ratio of consumers' monthly incomes to their monthly debt
payment installments has reached its highest level in 17 years.
Loan delinquencies are down 30% over the past two years. Total U.S.
household debt declined by
in the past 30 months. The final result? The average U.S.
consumer's credit score hit 696 (out of a possible 850) in May --
its highest level in four years.
What's it mean to you?
If you invest in companies that cater to the U.S. consumer,
Equifax's report is very good news. It means that concerns that
crushing debt loads, combined with high unemployment and stagnant
wages, will turn consumers into "zombies" incapable of spending on
anything more than the bare necessities are perhaps
Last week, we also saw
) , and
) report strong profits, indicating that banks are flush and at
to lend. So what happens if these banks start looking at consumers'
FICO scores and finding them creditworthy?
These banks could start writing new loans, helping consumers
resume shopping sooner than expected. Indeed, a recent Fed survey
of bank loans notes increased willingness among America's bankers
to vouch for consumers wanting to buy a new car. That could be good
) , and
(GM) , which all ranked among the top 10 brands in last month's
J.D. Power 2011 U.S. Initial Quality Study. It may be less good
(F) , which plunged in the rankings amid customer complaints about
its "MyFord Touch" computer interface.
Overall, though, with U.S. auto sales now running 34% below
their Year 2000 peak , I'd say if you're looking for a way to
invest in Americans' improving credit scores, the automotive sector
is a good place to start your search.
Which automaker will take pole position in this race? Add them
all to your Fool Watchlist, and find out.
The Motley Fool owns shares of JPMorgan Chase and Ford
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