The American consumer is maxed out
The Economy, Real Estate July 2nd, 2008
More disturbing news about the American consumer. CNBC reports the following:
Home Equity Credit Line Delinquencies at New High
Late payments on U.S. home equity lines of credit rose to a 21-year high in the first quarter of 2008 due to continued stress in the housing market and general weakness in the economy, the American Bankers Association said Wednesday.
In its quarterly report on consumer borrowing, the bankers group said the percentage of home equity lines that were more than 30 days past due rose to 1.1 percent from 0.96 percent the prior quarter.
That rate is the highest since the ABA started collecting the data in 1987.
“It was a tough quarter for some people,” said ABA chief economist James Chessen in a statement. “Faced with rising food and gas prices and little income growth, fewer resources have been available to manage debt.”
Also, according to CNN Money:
Payroll report: 79,000 private sector jobs lost in June
The National Employment Report from Automatic Data Processing showed a 76,000-job drop for goods-producing businesses, the 19th monthly decline in a row, coupled with a 3,000 job decline in the services sector.
A majority of the production job losses came from the manufacturing sector, which lost 44,000.
The New York Times has this article:
Deepening Cycle of Job Loss Seen Lasting Into ’09
As automakers dropped their latest batch of awful sales numbers on the market on Tuesday, reinforcing the gloom spreading across the economy, the troubles confronting American workers seemed to intensify.
Plummeting home prices have in recent months eliminated jobs for hundreds of thousands of people, from bankers and real estate agents to construction workers and furniture manufacturers. Tighter lending standards imposed by banks in the wake of huge mortgage losses have made it hard for many Americans to secure credit — the lifeblood of expansion in recent years — crimping the appetite of consumers, whose spending amounts to 70 percent of the economy.
Joblessness has accelerated, and employers have slashed working hours even for those on their payrolls, shrinking the size of paychecks just as workers need them the most.
