Officially, Friday is Ben Bernanke's birthday, but we can understand if he's too pooped to party after last Friday. It was a heck of a week that began with the market edging lower each day in anticipation of a better-than-expected jobs report. That report was better- than- expected and stocks...exploded to the upside. In fact, last Friday everything came out better -than-- expected.
Consumer Confidence: the leap to 82.5 from 75.1 signals a breakout in a pattern that suggests a new normal with respect to confidence levels. It's important to note the changes in confidence over the years. The market high of 2007 wasn't matched by confidence coming back, and now that records are being shattered, confidence is mired in an even deeper funk. Consumers continue to worry about keeping their jobs and wondering when their wages will make a meaningful rebound. They sense we've turned a corner, but we are not breaking any land speed records.
Consumer Credit: surged $18.2 billion in October, while September was revised higher to $16.3 billion. Non-revolving debt continued to power ahead lead by demand for student loans (+$5.2 billion) and new automobiles. But, it was revolving credit, which is the evidence that probably brought a smile to the face of the architect of the virtuous cycle, that turning the corner has finally arrived. Climbing the most in five months, consumers increased credit card use by $4.3 billion. Outstanding credit card debt is a long way from its peak of $1.0 trillion in December 2008, but it is trying to climb off its base of $797.9 billion established in April 2012.