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More optimistic consumers are propelling the economy forward, even as businesses pull back.
By NELSON D. SCHWARTZ
The pickup in spending by consumers, along with a burst of defense orders and a stronger housing market, helped the economy expand at an annual rate of 2 percent in the third quarter, a slightly better pace than had been anticipated, according to government data released Friday. In the previous quarter, economic growth had dipped to a rate of just 1.3 percent.
While growing more confident that the housing market has stabilized, households have been buoyed by lower energy prices, until recently a rising stock market and a slight improvement in employment. After years of shedding debt, there are also signs that consumers are starting to borrow again.
“Consumers are feeling wealthier so they are still out there spending,” said Joshua Dennerlein, an economist with Bank of America Merrill Lynch.
Housing values and stock values contribute to consumers’ sense of financial well-being.
Rise in Household Debt Might Be Sign of a Strengthening Recovery
By ANNIE LOWREY
WASHINGTON — For the first time since the Great Recession hit, American households are taking on more debt than they are shedding, an epochal shift that might augur a more resilient recovery.
For two of the last three quarters, American households’ total outstanding borrowing on things like credit cards, mortgages and auto loans has increased after falling for 14 consecutive quarters before then. Some economists even see an end to the long, hard process of deleveraging — as they refer to the cutting of debt relative to income or the nation’s economic output. That process, they say, has been a central reason for the extraordinary sluggishness of the recovery.
“We’re at an inflection point,” said Kevin Logan, the chief United States economist for HSBC. “Debt is less of a burden” for households, he said.
stories front page NY Times and front page Business Section NY Times
is this the 'recovery'
By NELSON D. SCHWARTZ
The pickup in spending by consumers, along with a burst of defense orders and a stronger housing market, helped the economy expand at an annual rate of 2 percent in the third quarter, a slightly better pace than had been anticipated, according to government data released Friday. In the previous quarter, economic growth had dipped to a rate of just 1.3 percent.
While growing more confident that the housing market has stabilized, households have been buoyed by lower energy prices, until recently a rising stock market and a slight improvement in employment. After years of shedding debt, there are also signs that consumers are starting to borrow again.
“Consumers are feeling wealthier so they are still out there spending,” said Joshua Dennerlein, an economist with Bank of America Merrill Lynch.
Housing values and stock values contribute to consumers’ sense of financial well-being.
Rise in Household Debt Might Be Sign of a Strengthening Recovery
By ANNIE LOWREY
WASHINGTON — For the first time since the Great Recession hit, American households are taking on more debt than they are shedding, an epochal shift that might augur a more resilient recovery.
For two of the last three quarters, American households’ total outstanding borrowing on things like credit cards, mortgages and auto loans has increased after falling for 14 consecutive quarters before then. Some economists even see an end to the long, hard process of deleveraging — as they refer to the cutting of debt relative to income or the nation’s economic output. That process, they say, has been a central reason for the extraordinary sluggishness of the recovery.
“We’re at an inflection point,” said Kevin Logan, the chief United States economist for HSBC. “Debt is less of a burden” for households, he said.
stories front page NY Times and front page Business Section NY Times
is this the 'recovery'
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