Tuesday’s Decline in Consumer Habits and Optimism

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Data released today (Tuesday) shows a drop in Week-to-week and Year-to-year Store Sales, as shown below…we’ll see if this weakness persists in the weeks ahead.

Further data today also showed a drop in Consumer Economic Optimism and in Consumer Credit, as shown on the graphs below.

It’s interesting to note that consumers have been borrowing at a higher value level in 2012 and 2013 than they were in the years leading up to the financial crisis. Any increase in loan rates from the banks could lead to defaults and pose a problem for those institutions. If the amount of loans continues to decrease, we may see banks raise rates to compensate for any losses that may be incurred in revenues…that could then spawn such defaults.

Not that the markets are paying attention to economic data anyway…but am mentioning this nonetheless.