Consumer borrowing was strong in September and consumer confidence slipped slightly as November began, but it remains at a high level during the holiday shopping season in the latest update of one of the top barometers of the public mood in the United States.
The Federal Reserve said consumer credit rose at a seasonally adjusted annual rate of 5.5 percent during the third quarter. In September the increase was 6.75 percent, which Bloomberg said was the most since November of 2016.
MarketWatch said total consumer credit rose $20.8 billion in September, to a record seasonally adjusted $3.79 trillion, up from a gain of $13.1 billion in August.
Nonrevolving credit had its biggest gain since January, rising at an annual rate of 6.3 percent. MarketWatch said economists expected an increase in car loans because people who lost vehicles to hurricanes Harvey and Irma needed new ones.
On Friday, three days after the Fed’s report, the University of Michigan’s preliminary Index of Consumer Sentiment for November showed a three-point drop, from 100.7 to 97.8, but remained at a high level. It has averaged 96.8 this year.
Richard Curtin, chief economist of the university’s Surveys of Consumers, attributed the decline to “widespread losses across current and expected economic conditions.”
“Consumers (and policy-makers) have four key concerns: prospective trends in jobs, wages, inflation and interest rates,” Curtin added. “An improving labor market was spontaneously mentioned by a record number of consumers in early November, and anticipated wage gains recorded their highest two-month level in a decade. These favorable trends were countered by a slight rise in year-ahead inflation expectations and a growing consensus that interest rates will increase during the year ahead.”
Curtin said the preliminary confidence number is not enough to show that job gains have led to higher inflation.
“While the expected Fed rate hikes seem to be the right pre-emptive action, the critical issue is whether income gains will be sufficient to outweigh rate hikes in home and vehicle purchase decisions,” he said.
The Labor Department said 239,000 initial jobless claims were filed for the week that ended Nov. 4, an increase of 10,000 from the prior week. The government said the four-week moving average was 231,250 — the lowest level for the average since March 31,1973, when it was 227,750.
MarketWatch said the claims level points toward the nation’s jobless rate continuing to decline and noted that some analysts think the rate could fall below 4 percent in the near future.
The Labor Department said the number of job openings, a statistic that lags the jobless claims figure, was 6.1 million at the end of September.
“Job openings have been at or near record high levels since June, the department said. “The job openings rate was 4.0 percent in September.”
The department said the total number of private and government job openings did not change much during the month. Openings rose in professional and business services (up 156,000), other services (up 52,000), state and local government education (up 36,000) and the federal government (up 15,000).
MarketWatch noted that although hiring has been on the rise for several years, hourly pay rose just 2.4 percent for the 12-month period that ended in October.
Although last week was thin on economic reports, this week brings several important ones.
The small-business index of the National Federation of Independent Business and the Labor Department’s Producer Price Index, both for October, will be released today.
On Wednesday the Labor Department will release its Consumer Price Index for October and the Commerce Department will release its retail sales report, also for October.
The Federal Reserve Bank of New York will release its Empire State manufacturing index on Wednesday and the Philadelphia Fed Manufacturing Index will be released on Thursday, as will the National Association of Home Builders/Wells Fargo Housing Market Index.
On Friday the Commerce Department will release its October reports on housing starts and building permits.