Last week’s surprisingly positive jobs report overshadowed another bit of good news for the economy: last November showed the biggest growth in consumer credit in 10 years. Typically that’s a sign that consumer confidence is up, banks are willing to lend, and demand is on the rise.
If you look back at recent monthly data, though, you’ll see that this particular green shoot should have poked through the ground months ago, but was stymied by the GOP’s debt ceiling hostage drama.
Take a look at the evidence:
That’s a year’s worth of data. Taken in the context of the collapse of the credit bubble, it’s a pretty small blip (see the right side of image below). But it’s a pretty big hit to a fragile recovery. It was only by November that total consumer credit returned to where it had been before the standoff on Capitol Hill. Look at the graph and you’ll see that the growth we just experienced could have come in July and August in the absence of that fight.
Charts by Clayton Ashley.