Friday, May 25, 2018
Business

Improved economic confidence leads to jump in consumer borrowing

WASHINGTON — Americans are feeling confident enough in the economy to go back to a time-honored tradition — taking on a little extra debt.

Consumer borrowing surged in November by $20.4 billion, the Federal Reserve said Monday. It was the third straight increase and the largest monthly gain in a decade.

The jump in borrowing was largely because people took out more loans to buy cars and swiped their credit cards frequently to purchase holiday gifts.

In November, total consumer borrowing rose to seasonally adjusted $2.48 trillion. That's just below the $2.52 trillion that consumers borrowed in December 2007, the month that the country fell into recession.

Total borrowing is up from a post-recession low of $2.39 billion in September 2010. Borrowing tumbled to that level after consumers slashed their debt for nearly two years.

Consumers have increased their borrowing in six of the past nine months. Americans are taking on more debt after seeing the unemployment rate drop and the economy improve, albeit modestly. Many are also leaning on their credit cards and loans to make up for wages that haven't kept pace with inflation this year.

Holiday sales were solid in November, and the U.S. auto industry had its two best sales months for the year in November and December. The Fed's credit report appeared to reflect those sales.

The category that measures credit card debt rose in November by $5.6 billion, the most since March 2008. Its gauge that tracks auto loans increased $14.8 billion, nearly matching July's gain that was the biggest since February 2005.

Paul Edelstein, director of financial economics at IHS Global Insight, expressed concern that consumers may have relied on their credit cards to finance holiday purchases.

The rise in borrowing comes as many consumers are seeing little to no growth in their paychecks. Inflation-adjusted, after-tax incomes shrank by nearly 2 percent in the July-September period.

To make up the difference, many consumers have reduced the amount they save. The savings rate fell in November to 3.5 percent — the lowest level since the recession began. The savings rate jumped in 2008 to 5 percent and stayed above that level until early last year.

In December, employers added 200,000 jobs and the unemployment rate fell to 8.5 percent, the government said Friday. It was the sixth month in a row that the economy had added at least 100,000 jobs, the longest streak since 2006. And the unemployment rate dropped to its lowest level in nearly three years.

With more jobs and better pay, consumers could step up spending even further. That could lead more companies to add workers, which ultimately drives more spending and more hiring. Economists call that a virtuous cycle.

Still, a recession in Europe could dampen demand for U.S. exports and weaken financial markets.

Comments
Is the Lightning’s Jeff Vinik the best owner in professional sports?

Is the Lightning’s Jeff Vinik the best owner in professional sports?

Hope of another Stanley Cup has dissolved, and soon the ice will follow. Yet even if sorrow is the price of devotion, the true hockey fans will still buy in when the next season comes around.That concept may not be unique to Tampa Bay, but it does se...
Published: 05/26/18
Five members of 69ers motorcycle gang indicted on federal charges

Five members of 69ers motorcycle gang indicted on federal charges

Last year three members of the 69ers Motorcycle Club gang were implicated in the execution of a rival gang leader in the middle of rush hour traffic in Pasco County.Now those three and two other 69ers members have been indicted on federal charges tha...
Published: 05/25/18
With makeover, ZooTampa at Lowry Park takes a page from the theme parks

With makeover, ZooTampa at Lowry Park takes a page from the theme parks

TAMPA — Behind the construction walls near the carousel at ZooTampa at Lowry Park, hammers, saws and power drills made a racket in the blazing Friday heat. A raft full of 100-pound water jugs took test trips on the new Roaring Springs ride set ...
Published: 05/25/18
U.S. news outlets block European readers over new privacy rules

U.S. news outlets block European readers over new privacy rules

LONDON — U.S. news outlets including The Chicago Tribune, The Los Angeles Times, The Orlando Sentinel and The Arizona Daily Star abruptly blocked access to their websites from Europe on Friday, choosing to black out readers rather than comply with a ...
Published: 05/25/18
Tampa Electric appeals OSHA findings for October accident

Tampa Electric appeals OSHA findings for October accident

TAMPA — Tampa Electric Co. is appealing a recent citation by federal regulators. The Occupational Safety and Health Administration hit the utility with a $76,050 fine and a "serious" violation in April following its investigation into an accident in ...
Published: 05/25/18
Fiat Chrysler recalls 4.8 million cars, warning owners: Don’t use the cruise control

Fiat Chrysler recalls 4.8 million cars, warning owners: Don’t use the cruise control

Associated PressDETROIT — Fiat Chrysler is recalling 4.8 million vehicles in the U.S. because in rare but terrifying circumstances, drivers may not be able to turn off the cruise control. The company is warning owners not to use cruise control until...
Published: 05/25/18
Federal Reserve chairman warns his agency must be free from political pressure

Federal Reserve chairman warns his agency must be free from political pressure

Associated PressFederal Reserve Chairman Jerome Powell warned Friday that the Fed’s independence from political pressure must be respected if it is to succeed in controlling inflation, maximizing employment and regulating the financial system. His re...
Published: 05/25/18
Restaurants like Ford’s Garage use the experience to get you in the door

Restaurants like Ford’s Garage use the experience to get you in the door

Tim Butler’s first car was a Ford Model A pick-up truck — a pearl fawn and cherry red pick-up he got his senior year in high school from his dad, who renovates antique cars. That’s why as Butler waited for a table at the Ford’...
Published: 05/25/18
St. Petersburg man fined $507,513 in penny stock scheme

St. Petersburg man fined $507,513 in penny stock scheme

TAMPA — A St. Petersburg man was fined $507,513 and permanently barred from participating in the offering of a penny stock in a case involving a scheme to manipulate the price of Aureus, a penny stock company incorporated in Nevada, officials said Fr...
Published: 05/25/18
Broadcom’s CEO tops highest-paid list with a $103 million payout

Broadcom’s CEO tops highest-paid list with a $103 million payout

Times staff and wiresNEW YORK — Chief executives at the biggest public companies got an 8.5 percent raise last year, bringing the median pay package for CEOs to $11.7 million. Across the S&P 500, compensation for CEOs is often hundreds of times highe...
Published: 05/25/18