NEW YORK -- No other statistic may be more important to credit union card issuers for the coming year than the measure of consumer confidence. With consumer spending accounting for more than 70% of U.S. economic growth and consumers committing a steadily growing percentage of spending to cards, whether or not they pull out their credit cards and swipe them will account for a significant part of credit union's card interchange income.
"Looking ahead, consumers are extremely pessimistic, and a significantly larger proportion than last month foresees business and labor market conditions worsening," said Lynn Franco, director of the Conference Board consumer research center. "Their earnings outlook, as well as inflation outlook, is also more pessimistic, and this news does not bode well for retailers who are already bracing for what is shaping up to be a very challenging holiday season."
The last time the U.S. had a significant recession was 2001. During that economic downturn American consumers kept using their cards, which mitigated the impact of unemployment. Low prices for food and energy helped and, unlike now, credit remained widely available so even those who were losing their jobs or seeing their wages fall could keep spending.
But this time the Conference Board and other economic observers note the economic downturn has hit Americans in their households, by both forcing down the value of their homes and cutting off their access to credit. Only time till tell, they said, how American consumers and credit union members are willing-and able-to react.
--dmorrison@cutimes.com
"Looking ahead, consumers are extremely pessimistic, and a significantly larger proportion than last month foresees business and labor market conditions worsening," said Lynn Franco, director of the Conference Board consumer research center. "Their earnings outlook, as well as inflation outlook, is also more pessimistic, and this news does not bode well for retailers who are already bracing for what is shaping up to be a very challenging holiday season."
The last time the U.S. had a significant recession was 2001. During that economic downturn American consumers kept using their cards, which mitigated the impact of unemployment. Low prices for food and energy helped and, unlike now, credit remained widely available so even those who were losing their jobs or seeing their wages fall could keep spending.
But this time the Conference Board and other economic observers note the economic downturn has hit Americans in their households, by both forcing down the value of their homes and cutting off their access to credit. Only time till tell, they said, how American consumers and credit union members are willing-and able-to react.
--dmorrison@cutimes.com
