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OPINION

Happy Days?

The opinions expressed by columnists are their own and do not necessarily represent the views of Townhall.com.
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Don’t look now, but consumer credit card debt just hit an all-time high.  I understand if your initial reaction is to head for the hills, but there’s a stark difference between April 2008 and June 2017.  Don’t get me wrong; I’m not trying to be sanguine or even whistle through a graveyard, but this isn’t about irrational exuberance –it’s about increased confidence backed by improving fundamentals.

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The fact is the American public is still more cautious now than they’ve ever been for more than a decade and have more disposable income. The June Consumer Credit data from the Federal Reserve came in less than expected, but enough to nudge the overall number to a new record of $3,855,816,000,000.

  • Revolving Debt: +4.1 billion to $1,021,693,000,000
  • Non-Revolving Debt: +8.3 billion to $2,834,122,000,000
  • Auto Loan Debt: $1,0217 Trillion
  • Student Loan Debt: $1,450,500 Trillion

Turning Point

The question is: are happy days here again, or is history playing out in a way that suggests the market and economy are on the precipice of a collapse?

Obviously, when adjusted for inflation, the level of debt should rise more to give pause.  Moreover, outside of student debt, the pace of delinquencies is well below the level going into the Great Recession. The fact is that even with punk wages, folks have more money to spend. However, many have exercised the kind of caution that calls to mind that the restricted spending years after the Great Depression should have been a distant memory. 

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On that note, I’m watching retail and restaurants this week. I saw compelling action Monday, along with others in the consumer space:

Staples:

  • (TSN) Tyson Foods (earnings)
  • (EL) Estee Lauder Companies
  • (COTY) Coty Inc.

Discretionary:

  • (BBY) Best Buy
  • (DG) Dollar General
  • (KSS) Kohl’s
  • (DLTR) Dollar Tree
  • (SIG) Signet Jewelers Ltd.
  • (PVH) The Phillips-Van Heusen Corp.

Today, the earnings parade picks up.

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