Last week the Commerce Dept reported that consumer credit had grown in November at an annualized rate of 10%. 

The growth consisted mostly of car and truck sales, which shows increasing confidence and pent up demand.

Below is a chart of revolving credit outstanding which excludes auto sales.  As we can see, the American consumer is still struggling.

Taking a longer perspective, let’s look at the personal savings rate for the past 50 years.  The savings rate is calculated by subtracting all personal consumption expenses, including interest, from disposable personal income (gross income less taxes).

The savings rate shows the underlying resilience – or lack of it – of the average American household.  Savings helps fuel investment in companies, investment in local, state and federal government bonds.  As our savings fall, we become ever more reliant on foreign money to fuel this country’s debt and growth.