Health of Global Economy --- Part 2

4) Consumer Credit :
Since Credit crunch was preceded by a recession in the last 3+ recession, it's essential to analyze the current consumer credit environment. This report is released by Fed (Latest one ).  In 2019, this is been increasing with 5% + (Revolving credit increased at an annual rate of 5-1/4 percent,). In recession, this decreased. This is the unsecured credit and can be revolving or installment. Revolving credit is for credit card mainly and credit growth shows that consumer is healthy and spending.



5) Consumer Price Index (CPI) - CPI is released by U.S. Bureau of Labor.It's essential for identifying periods of inflation or deflation. Latest one



 Inflated (core CPI - excludes goods with high price volatility, such as food and energy) is muted for a long time (I think it's because of the amazon effect - competition). FED uses - core Personal Consumption Expenditure deflator, or PCE price index for gauging inflation. Core PCE is excluding food and energy prices.

6) The Conference board survey :
Consumer Confidence Index gives a good picture of U.S. consumer health. The Conference Board Leading Economic Index (LEI) for U.S. released by them is also very useful for early recession warnings. LEI has ten components :


Average weekly hours, manufacturing
Average weekly initial claims for unemployment insurance
Manufacturers’ new orders, consumer goods and materials
ISM® Index of New Orders
Manufacturers' new orders, nondefense capital goods excluding aircraft orders
Building permits, new private housing units
Stock prices, 500 common stocks
Leading Credit Index™
Interest rate spread, 10-year Treasury bonds less federal funds
Average consumer expectations for business conditions


Source:Bloomberg

7) University of Michigan Consumer sentiment Index 

Source: Bloomberg
The sudden drop in Augest 2019 is because of the Tariff 

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