Consumer credit is extremely bullish for U.S. growth


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The new U.S. consumer credit numbers reflect an economy that is reaccelerating, and that is very bullish for growth -- as well as inflation. All in all, U.S. household credit surged by $7.62 billion in February, ramping up faster than at any other time since June 2008. We are now back at pre-credit-crunch expansion levels, but with some changes. Revolving credit is still declining, which may be a near-term negative for credit card companies like MA ( quote ), DFS ( quote ) and AXP ( quote ). But with student lending soaring, SLM ( quote ) got a small bid today, and in theory a lot of that money could trickle out into the broader economy as the tuition checks clear. Either way, the velocity of money is picking up. The Fed really should be watching this. And in the big picture, this is very positive for the banks. The trend in consumer credit has reversed in a big way over the last five months off what was clearly the largest contraction ever in the credit markets.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Stocks
More Headlines for: AXP , DFS , MA , SLM , SPY

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