Economists expected a $15.0 billion rise in consumer credit. The Fed reported -$0.8 billion.
The Bloomberg Econoday consensus outlook “Expected up another strong $15.0 billion in February after rising by $18.1 billion in January.”
January was revised from $18.1 billion to $8.9 billion. That’s a net miss of $25 billion.
Real Consumer Credit in Billions of Dollars
It’s real spending that drives GDP and real credit is rolling over.
Revolving Consumer Credit
In nominal terms, revolving credit peaked in October of 20024 at 1.3689 trillion.
In real terms revolving credit peaked in April of 2008, the fourth month of the Great Recession.
Revolving credit tends to peak just before or in recessions.
How Much Credit Expansion Does It Take to Grow Real GDP?
Please take a look at my April 2 post How Much Credit Expansion Does It Take to Grow Real GDP?
Let’s explore expansion in Total Credit vs expansion in GDP over time.
Hello Jerome Powell, Is Everything Under Control?
On January 31, 2025, I asked Dear Jerome Powell, Is Everything Under Control?
Gold does not believe the Fed has things under control and neither do I.
Three Questions of the Day
- Is the Fed suddenly going to get things under control?
- Will DOGE cut $2 trillion or even $1 trillion in government expenses?
- Is Trump going to magically reduce the deficit via tariffs or any other means?
I will gladly pay you next Tuesday for a hamburger today.
This is a good thing. Maybe people will start living within their means. Credit should be for homes and autos. Everything thing else should be if you can’t afford to pay cash then you can’t afford to have it. People need to start saving for the future and unexpected expenditures.
China still hasn’t rolled over as you said yesterday. My moneys on XI telling Tramp to do one.
It’s only been one day.
Like I said they didn’t roll over. In fact they have just matched your tariffs. You are clearly not one of the clued up commentators on here.
The Chinese will not lose face again. read up on Chines history, start with the Opium wars. There is a job waiting for you in Trumps cabinet at the trade forecasting/tariff desk.
let it rest on the presidents desk. rock the house..
80% of Americans have less than grand for an emergency. I’m guessing that’s because these poor people are spending frivolously on luxuries. Haha!! Climb down from that tree monkey woman. I understand you need to punch someone on your way down. What’s a girl to do?
nothing is infinite, we all live within limits. By finding those limits early, we can allocate our resources such as they are, to provide for ourselves within our means.
its not difficult, but it requires planning, and feedback, checking that your plan is working and adjusting as needed.
We all can live with much less than we have or think we need.
Over-consumption is a disease of the soul, attempting to fill the voids of the mind with material goods.
The entire goal of advertising is to convince you, that you are lacking, and need whatever they are selling to fix you.
Don’t believe it….
Perhaps folks should manage their finances like drug users – cash.
Economists “Expected” and there is your problem. Look around and with a straight face, tell me Economist know what they speak off. Tell me most are not “Mouth Pieces” for whomever at the time. Tell me they “Don’t Lie” and then apologize for not being honest with me or yourself…
Economist Speak: January was revised from $18.1 billion to $8.9 billion. That’s a net miss of $25 billion. > Nice Job…
We Pay the Min, and Spend The Max or Rinse/Repeat. Most cant afford to pay off their debt, and need whatever is left for more important things. Once enough is there to tap, it’s gone!! Its called a “Recession” last I checked.
The economy is going to start rolling over quickly now. Trump said he wanted to crash the market and it worked. Trade is going to collapse, profits are going to collapse, and Americans will begin to lose their jobs in huge numbers. Next, real estate prices will begin to collapse. People will begin moving to cash and consumers are going to hold fast. The Democrats will win the mid-terms by wide margins, and we’ll have two more years absolute insanity after that.
– The economy is going to start rolling over quickly now.
> It has been for about 2-3 Years now. Being “Papered Over” makes it seem like now, but it’s been here for quite some time.
– Trump said he wanted to crash Fix the markets and it (May Have) worked.
– Trade is going to collapse. > It has and will continue yes.
– profits are going to collapse. > They have and will continue yes.
– Americans will begin to lose their jobs in huge numbers. >They have and it will continue yes.
– Next, real estate prices will begin to collapse. > They have and it will continue yes.
– People will begin moving to cash. > They have and it will continue yes.
– consumers are going to hold fast. > They have and will continue yes.
> Until the Tariffs take hold, and things start to switch around. Also awaiting the Trillions already heading this was in overwhelming investments in Manufacturing for Americans. Amongst a host of more good news on the way. It will seem bad, but mostly due to the MSM Narratives and False Reporting, but that will change soon enough.
– The Democrats will win the mid-terms by wide margins, and we’ll have two more years absolute insanity after that. > Not a chance! I suspect a larger majority in the Mid-Term, and Vance with a wipeout next election. Cruising to another term is my guesstimate, based on how the future looks to be shaping up.
Trump is a virus. Many who caught it are very ill.
Economy is going into the tank and the market is up. Makes perfect sense.
A. There IS going to be an epic bounce someday. B. You spoke too soon…:-)
Savings products have a positive economic multiplier. Money products have a negative economic multiplier. In the circular flow of income, unless savings are expeditiously activated, put back to work, a dampening economic impact is generated. The FED offsets this impact by creating new money and credit.
The economy creates credit in good times and destroys it in bad times. Credit is literally a lending entities willingness to lend someone money at a reasonable interest rate due to their perception of someone’s ability to pay it back. When banks lend, they are actually creating new money. In good times, people have jobs, incomes and profits are increasing, production is increasing and banks, through lending, create the new money necessary for people to purchase the new products being created. The cycle is reversed in bad times. The Fed only began creating money when it started QE. And that was necessary because the Fed had stopped regulating bank fraud. They either had to create money, or have the federal government take over the nation’s major banks. That’s real socialism. And it is better to socialize losses through inflation than socialize private institutions.
No, the real bills doctrine was denigrated during the Great Depression.
It appears those 24% interest rates have caught up with the consumer.
Heck, the Federal Government cannot even bear a 4.25% interest rate.
Who could have thought the consumer would be ‘healthy’ with a 7% mortgage rate, 8% car loan rate, 6.5% student loan rate, and the bigee of them all, credit card interest rates.
The above rates would matter little if the principal was reasonable, but the bubble to end all bubbles have put an end to that hope.
The bills have finally come due.
And don’t forget all the extend and pretend Biden did. Illegal debt forgiveness and rent moratoriums on things like FHA which literally are still going on. Disgraceful
Congress had no issue forgiving PPP loans to themselves and their campaign contributors. God forbid people who were encouraged to go into debt to get a degree receive it.
Since ruled unconstitutional….PPP was bullshit also. As were vax mandates etc. Absolutely terrible governance
I hope you are also for going back and arresting those who committed fraud with PPP loans, one of the things DOGE Is committed too….Oh your not? I wonder why
They should, and doesn’t everybody know one or a few that loved that time period? I do!
I’m absolutely for arresting those committing PPP fraud. I won’t hold me breath though.
Nicely put!
My hypothesis is that we have massive social problems (drugs, broken families, a failure to adequately police crime in urban environments, terrible public education that fails to prepare children for an ever shifting reality, etc) that have gone unaddressed for decades. Most people (especially those who can’t afford to simply move to a zip code less affected by this decay) both accurately see that something has gone wrong and that people in power are gaslighting them.
Any politician that plays to those last two points is going to have a huge advantage– it doesn’t matter whether they have good solutions or not.
You mean the status quo wasn’t working? No shit
We’ve had all of those things for the last 60 years or so, everyone sees it as do the politicians. The people don’t know how to fix it, and they just keep reelecting incumbent politicians who don’t know how to fix it either. It isn’t going to change. So move to a better zip code.
A decent zip code can become a terrible zip code overnight, however. My twin is a doctor and he lived in a really great zip code when he was starting his family. Section 8 turned it into a VERY undesirable area practically overnight. This was a neighborhood of doctors, lawyers, and other professionals that got replaced by welfare people. When my older sister lived in Nashville in the late 1990s, she was doing an internship with a Big 6 accounting firm, and part of her pay package was accomodation in a neighborhood in Antioch called Nashboro Village. It was a luxury area with low crime. By the time I got a job near Smyrna a couple of years later, related to the automotove industry, the Nashboro Village area was a high-crime area. I was wondering if it was even the same Nashboro Villlage because it had changed so much so fast. It was like a Twilight Zone episode. I got an apartment there just because it was the closest place to work that I could find an apartment. Co-workers were laughing, warning me that I’d get attacked just for my leather jacket. It was extremely hard to even get an apartment because most of the good apartments were Section 8 and the landladies told me a person’s salary had to be under $28,000 to rent there. The place I found, Stone Ridge, was a mix of middle class Americans and mostly illegal immigrants. One was drunk and drove into my car on Cinco de Mayo. I was like “eff this ess” and moved back to Korea.
the enshitification of America was deliberate and moved slowly enough to seem natural, until the internet made people able to see the bigger picture happening everywhere.
Trade deal negotiations underway with both South Korea and Japan. So much for the bedwetters in here. Pushing up 10% from yesterdays lows as those with limp wrists can’t grip reality.
So we’re not going to get S. Korea and Japan to pay tariffs to reduce the deficit and move their industries here?
“January was revised from $18.1 billion to $8.9 billion. That’s a net miss of $25 billion.”
That means that $25 Billion MORE was not borrowed to prop up this mess that we call “The Economy.”
Why are we FALLING for this bullshit Economic Data. Why does GDP freaking matter? If we did not KNOW about these numbers, our lives would continue.
Thus, this is just headline Mania. It is time for it to stop. CREDIT should not be the engine of an economy: PRODUCTIVITY should be the ONLY PRIMARY measure.
“ If we did not KNOW about these numbers, our lives would continue.” you are literally commenting on an economics blog. if you dont want to look at numbers thats pretty easy to pull off. most people seem to manage it
Credit is a reflection of, and a primary driver of, productivity. If I can’t borrow to buy machinery, I can’t increase employee productivity.
don’t try to sway us with facts….
other than essentials I am not buying anything and many persons I chat with are doing the same
Eat at home and skip the summer vacation.
I just got a few electronic gadgets I’ve been waiting on to go down in price. I don’t think that will happen for a while.
The American consumer is at the end of a 1982 13/32 of 33 year credit cycle. They collectively are tapped out with debt and interest payments on that debt. American consumption drives third world economic activity. The American service sector is dependent on domestic credit and debt expansion. The SPX 3 Feb 2025 8/19/20/13 day :: x/2-2.5x/2.5x/1.6x terminal growth and incipient crash fractal decay series saw a nonlinear low on 3rd fractal day 20 with a growth rally on the same day which is day 1 of the 4th fractal 13 day growth and fractal crash decay subseries. My guess is that any rebound growth during this short 13 trading day period will be limited under the additional new tariff Armageddon conditions. Terminal Black trading day(s) in the terminal portion of the 13 day period will plummet global composite equity valuations and will provide a wake up call to both parties who may be enabled to reign in the executive branch.
American consumers become debt slaves so that other economies can suck off of our Credit TEATS!
No, it’s because you over consume as a nation. Buy less.
It’s not rocket science.
My question is what is Trump’s goal? Tariff revenue? Or a tariff free world?
Let’s assume that Trump manages to eliminate ALL tariffs worldwide, including those that the US charges. What will be the result in a zero-tariff world?
1. No tariff revenue for the US to reduce our deficit and debt, eliminate income taxes, and make us all rich.
2. Free and open markets worldwide, where the winners are those with competitive advantages.
3. Who has these “competitive advantages”? China, India, Vietnam, Indonesia, Mexico, Canada, and others.
4. Imagine a flood of inexpensive Chinese vehicles coming to America and wiping out the North American auto industry. Then watch this spread to almost all US manufacturing.
Is this the goal?
The goal doesn’t matter, all you’re going to get is The Trumpocolypse™ so plan accordingly.
I’m back from my trip to Canada.
The border crossing in Toronto (at Pearson airport) was a breeze. I didn’t use my NEXUS card because the missus didn’t want to split into a separate line. So I went in the general line with her and we talked to the border agent for about 30 seconds, confirming I am a TN visa holder and that we weren’t bringing back any food (a white lie because I brought back some fresh curd) or expensive goods.
I didn’t see anyone turned away or questioned excessively during our brief wait in line.
So whatever happened to those people in that article Mish posted a week or two ago was VERY out of the ordinary.
Or maybe your anecdotal evidence is the outlier? “I’ve never personally experienced an earthquake so they must not happen” is not compelling.
Go to Europe. There is nothing more humiliating than being an American, shoeless and holding your pants up with one hand and holding your belt in another while going through TSA. While watching Europeans laugh at you as they breeze to their gates.
Where in Europe?
I’ve been to the UK many times for work. Most recently this past October. The only security lines in the UK were the regular ones that everyone goes through for any flights in the UK (domestic or foreign).
Unless you have a Texas sized belt buckle made of metal you don’t need to take your belt off despite what they say. Unless the terror alert status is on VERY high your belt won’t set off the detector (even those ones you step into that you hold up your hands while they scan) because I never take mine off and I never ‘beep’
Shoes are another matter unless you get one of the pre-screen programs (NEXUS for example) after which you never need remove them again (as an FYI you have to remove in the UK too).
Have you seen the maitenance and reliabilty stats of those chinese vehicles (not to mention infestation of spyware)? Cheap may not be cheap enough.
They may flood the market with them but for how long? Everyone buys a Volkswagen once.
Nope. How about you show those stats to me.
Ford CEO Jim Farley said his Chinese made Xiaomi EV is the best car he’s ever driven. Chinese companies are driven by engineers, not Wall Street financiers. We don’t stand a chance.
Nothing wrong with VW, wouldn’t touch a BYD.
Tariffs come in as a trigger for domestic industrial revival. The thinking is: by making imports expensive, you create room for U.S. producers to step in
But here’s the problem: American factories can’t scale up overnight.
So in the short term, consumers will face higher prices.
The administration knows this.
That’s why they’re front-loading the pain now, betting that by 2026, the benefits will be visible.
In the meantime, they’re offering some near-term relief.
Tax cuts have already been floated to help offset the cost burden on households.
https://threadreaderapp.com/thread/1907880105369845865.html
“ Tariffs come in as a trigger for domestic industrial revival. The thinking is: by making imports expensive, you create room for U.S. producers to step in”
That might work if tariffs were only targeting finished manufactured goods that we import.
But Trump is putting tariffs on almost everything.
Tariffs on raw materials and other inputs are simply increasing costs for US manufacturers, making them less competitive.
Right on…(as some used to say in the 60’s). But the effort to tax everything – including the raw materials that domestic manufacturers would use – shows how fundamentally ignorant and inept Trumps advisors are.
Not considered is the secondary effects of all of this. Much of the world will see the tariffs as an effort to extract concessions that will financially benefit the US. They will not trust the US on anything, given the incoherence, incompetence, and perceived greed of the Trumps tariffs. As an immediate second effect, does anyone think this will affect the tourism industry?
It already has, cancelled my FLA vacation this year and will do so next.
I take grave exception to having my investments hammered by Trumps policies, my only remedy is to return the pain.
No-one believes that trump has thought any of this through. A few cult like believers think that trump has credibility on the wold stage. The truth is that he does not and it is likely that he will crash the world economy.
Why should anyone negotiate with trump when he breaks every deal he makes and presents falsified financials.
MPGA: make prices great again!
trump has no goals besides being in the limelight headlines. the crowd around him this time are the founders of the greatest companies in a century. like the old robber barrons. their goals are pure and easy. to continue to be wealthy. but they don’t need factories or middle class here in usa to do it. the rest is eyewash.
please watch this. the best take on situation. to the end.https://www.youtube.com/watch?v=lXvI_IIhaHg
https://www.youtube.com/watch?v=lXvI_IIhaHg
Sorry. Watched the first minute. Saw how long it was. Not my cup of tea. Can you summarize the important stuff?
right, he’s completely contradicting himself. I assume it’s tariff free world, because that’s doable whereas onshoring, and having high tariffs indefintely don’t seem economically feasible
That is not the goal as I understand it. My sense is that the goal is to drastically reduce the US trade deficit while letting coubterparties decide what level of tariffs they’re comfortable with having as that is achieved.
The smart way to reduce the trade deficit is to reduce the budget deficit. Without the ability trade finished goods for treasury paper, foreign companies would have to use their dollars to buy US made products, or let the dollar fall dramatically relative to domestic currencies. Which would cause companies to move manufacturing to the US. But then you can’t just cut taxes without cutting spending.
correct
“Without the ability trade finished goods for treasury paper, foreign companies would have to use their dollars to buy US made products, or let the dollar fall dramatically relative to domestic currencies.”
In theory. In reality I suspect what would happen is that they’d buy hard assets (real estate, gold, even copper like China has done). The Japanese in the 80s bought a LOT of US property during their heyday of trade surplus. That would mean huge commodity / property bubbles that you’ll also remember called for limiting Japanese real estate purchases in the 80s.
We need to make it illegal for foreigners to own real estate here.
not illegal, but difficult, and require extensive documentation, so it is apparent who actually owns the property. Long term (99 year) leases like mexico does for beach front property for foreigners, is another option.
Bessent’s spiel is that tariff revenue comes up in the first few years and melts away after that. He says that’s ok because productive capabilities will increase. I’m guessing he would use excise taxes to make up for declining tariff revenue.
Attention. He wants the attention. He wants you to cheer him for his third win in a row of the golf tournament at his golf club. He wants you to tell him how smart and tough he is.
This is all he wants.
DOGE begins cutting in earnest after the Supreme Court and Congress squelch activist judges. The sky is the limit on savings. Scores of activist courts are unnecessary taxpayer burdens.
Not much savings will be found given activist politicians and unnecessary warfare.
(can’t term it ‘unnecessary war’ as the U.S. Congress hasn’t declared war in decades)
Many new factories will be built in the USA, with lots of robots, to sell (higher priced than China) goods to US consumers who wont have money to spend.
Or not.
Robot technicians and robot managers earn high salaries.
And then what? Go to their robot wives and robot pets and spend it?
I’m down.
try robot geisha, sure to raise spirits and possibly flesh as well…
Good morning. Very interesting. Has there ever been a government number that hasn’t been revised? Mostly to the downside.
On that note, if there is one thing that we have learned over the past 5 years it’s that the ‘expert’ class has been wrong about nearly everything. And maybe ‘nearly’ needs to be removed from that sentence.
So given that, why should we believe that the expert class has any real clue as to the net effect of tariffs over the long run?
Just asking.
Also. We don’t own enough gold.
Who we listen to and revere, “experts” or some other labeled class, is a fashion that comes and goes like skirt lengths.
I just await the next wave of cynicism in the wake of the latest Trusted Leaders faction. Rinse and repeat.
the illusions must constantly be ‘massaged’ to correct imbalances in perceptions by the masses targeted for consumption of the illusion. its part of a feedback loop to keep reality at bay.
a massive digital wallpaper that keeps changing to soothe or enrage those living within the boxes where the wallpaper resides.
its been this way since i was a boy, but it surely is more apparent these days.
What’s next – lay-a-way plans in Goldblatts Bargain Basement?
A few weeks ago it was reported that defaults were rising relatively quickly so it’s not surprising to see a pullback as credit giving institutions would have seen this in their internal data even earlier.
Defaults are no one’s faults, its a no fault economy worldwide madness, if all are insane, then they must be sane, because consensus defines sanity.
invest in land away from other people, and allow the madness to seep out of you and watch the madness from a safe distance.
Chaos is by its nature uncontrollable, no matter how wise or infatuated with themselves world leaders, cannot lead chaos. The illusion of control is threadbare and chaos keeps popping out all over. The world changes no matter how hard we try to keep it the same.
Albert Collins, Master Charge. Ouch.
https://www.youtube.com/watch?v=sDLGIj3_e_8
albert collins helluva guy…