Storch Advisers CEO Gerald Storch discusses the retail industry and consumer health on ‘Varney & Co.’
Americans have continued to open up their wallets and spend over the past two years, even in the face of stubborn inflation and high interest rates.
However, there are some signs the willingness among consumers to keep paying steep prices is beginning to fade.
New data published by Wells Fargo indicates that while the U.S. consumer remains stable, credit card volume is «losing steam.»
Card volume, which measures spending by both credit and debit cardholders, came in at around $2.6 trillion during the three-month period between July and September, a 5.3% increase compared to the same time last year.
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A pedestrian carries Nespresso shopping bags in San Francisco on Dec. 21, 2022. (David Paul Morris/Bloomberg via / Getty Images)
However, that represents a notable slowdown from the same time period during 2022, when card volume grew by 13%, and an even bigger drop from the third quarter of 2021, when it surged by 25%.
«After a strong 2021 and 2022, card volume growth has slowed during 2021, implying a moderation in consumer strength,» the Wells Fargo report said.
A solid job market and big wage increases have helped to buoy consumer spending in recent months, despite high inflation. However, many economists expect consumers to grow more cautious in the coming months as student loan payments resume and high interest rates continue to work their way through the economy. On top of that, more Americans are relying on their credit cards to cover necessities.
Credit card debt topped $1 trillion earlier this year while delinquencies surged to an
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