Economy Continues to Slow as Consumer Credit Collapses
According to Michael Lombardi, lead contributor to Profit Confidential and financial expert,
the evidence of the slowing U.S.
economy is quite apparent. While the occasional economic data might suggest
there are spots of recovery in the U.S. economy, Lombardi reports that
these are tiny bounces in a bigger scheme of problems.
“The biggest problem, as elementary as it sounds, is that consumer
confidence in the U.S.
economy is collapsing,” says Lombardi. “In order for the U.S. economy to
grow, consumer confidence has to be robust.”
In the article “More
Bad Economic News: Consumer Credit (Borrowing) Collapses,” Lombardi notes
that the U.S. economy is
based on consumption and more than two-thirds of gross domestic product (GDP)
in America
consists of consumer spending.
“If consumer confidence is low, consumer spending is low—damaging the U.S. economy,” explains Lombardi.
Lombardi claims that the decline in consumer credit has
caught the U.S.
economy by surprise.
“Consumer
confidence is in the slumps because the U.S.
economy is in a horrifying state,” says Lombardi, noting that consumers can’t
be blamed, as they are justified in their lack of confidence in the U.S.
economy.
“For economic growth, consumer confidence has to increase, and consumers need to feel comfortable while spending,” reasons Lombardi. “Economic growth happens when wealth in an economy is created, and this is clearly not being witnessed here in the U.S. economy.”
Considering consumer credit to be a key indicator of
consumer confidence, Lombardi reports that consumer credit fell to $3.3 billion
in July, the first drop after 10 months of positive data.
To see the full article and to learn more about Profit Confidential, visit www.profitconfidential.com.
