The health of the consumer is extremely important to ongoing expansion in the U.S. economy. The good news is that consumers are doing a great job in handling their debt. The national delinquency rate on auto loans has dropped to 0.33%, the lowest since TransUnion started tracking the data back in 1999. The positive news extends to our credit cards too. Commercial banks report that the delinquency rate on credit cards stands at a record low of 3.11% (the data goes back almost 21 years).
These consumer trends are contributing to our optimistic outlook for the U.S. through the near term. However, a Gallup poll recently revealed that 60% of respondents think the economy is “getting worse.” So we are doing better with our debt, jobs are being created, banks are looking for good customers, and the Dow is up 7.1% for the year, but we are still pessimistic. Maybe we just don’t want to hear the good news and are in some way happier in our pessimism. That conundrum will take more than an economist to solve.