Credit Card Usage Falls Along With Consumer Spending
Credit card spending has been in a downward spiral since September 2008. In June credit card usage by consumers dropped another 0.7%, signaling the overall mood of the national economy.
With job growth seemingly in a stalled state thanks to a slow moving economy, people are more inclined to try and build up a nest egg rather than spend thoughtlessly on consumer products as they have done in better financial times.
The credit card industry is one of the nations financial arms that has been hit hard since 2008, a direct result of the prolonged and weakened economy. Falling yet another $1.3 billion in June has left many economists blaming a still stagnant U.S. economy.
In what is described as a financial “catch 22,” nonfarm payrolls in July fell by 131,000 jobs, thus slowing down consumer spending even more and enforcing the public’s already entrenched fiscal mindset of keeping their money safe in the bank.
Job creation relies on a healthy economy which in turn relies heavily on consumer spending and general retail consumption. The general public is not spending money due to financial concerns and so as a direct result, jobs are not being created or sustained.
So the nation is caught up in this vicious cycle of weakened consumer confidence that does not seem to have any end while in this financial catatonic state. Economic stimulus packages have worked well overseas in countries such as Australia and have been touted by many senior financial analysts as the kick start needed to get this stalled economy back on track.
With retail sales down again for the month of July, there is still no end in sight to this global and U.S. national economic slowdown.
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