Consumer spending habits are starting to shift as inflation rises and people emerge from the pandemic.
In the fourth quarter, U.S. credit card balances rose by $52 billion, the biggest quarterly jump in 22 years of New York Fed data, but they are still down $71 billion from the end of 2019.
U.S. credit card delinquency rates rose to 1.62% from a more than three-decade low of 1.48% in the second quarter of last year, still far from the 6.6% peak hit in the first quarter of 2009, the tail-end of the Great Recession, according to the St. Louis Fed. "For this year, consumer spending should remain resilient," said Zhou, the Bank of America economist. "For next year, it's a little less certain – and certainly toward the second half of next year, that's when risk of more of a slowdown in consumer can arise."CEO Dave Calhoun on Wednesday said demand for new planes from airlines is recovering thanks to a resurgence of travel demand.
"That second year, when inflation begins to take a toll on consumers' pocket, that is when those numbers really begin to matter to us," Calhoun said in an interview with CNBC's "Squawk on the Street." For the moment, many consumers, like Cindy Maher, a 58-year-old who owns a leadership development consulting firm and lives in Bloomfield, Connecticut, feel comfortable enough to maintain their spending habits.Maher said she's noticed nearly $7 loaves of bread and that it costs $70 to fill up the tank of her car. But she said in her two-income household, she can absorb those costs.
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