Sunday, April 13, 2014

Another Spectre For Rising Consumer Spending

Delinquency rates on consumer and credit card loans are at 20+ year lows.
Graph 1

Charge-off rates are at 15 and 20 year lows.
Graph 2

Looking at cars, 48-month financing looks like it is supercheap by recent historical comparison, and the inventory to sales ratio is moving upward (suggesting favorable conditions for consumers).  The housing market still looks tight.  This could mean that people (especially young persons and young couples) will look toward car purchases as a way to substitute the American dream.  Also, appears to be a trend in leasing autos.
Graph 3

The market seems to have changed since the recession, and why not?  Fiat acquired Chrysler in the wake of the recession, and Chevrolet required a massive loan from the federal government to prevent liquidation bankruptcy.  These kinds of corrections may have helped correct the flawed thinking of those and other automakers.
Graph 4

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