What to make of the U.S. economy under President Donald Trump? Three gauges shed some light.
U.S. consumer credit grew by $12.4 billion in June versus a rise of $18.3 billion in May — a 32 percent change — the Federal Reserve Bank reported Aug. 7. June's total outstanding credit was $3.86 trillion, with an annual growth rate of 3.9 percent, versus May's yearly rate of growth of 5.9 percent.
"Preliminary estimates indicate weak credit growth in June," according to Paul Kupiec, a resident scholar at the American Enterprise Institute in Washington, D.C. "These data point to a continuing trend of tepid economic growth — perhaps even a tad weaker than in recent quarters."
Dean Baker, co-director of the Center for Economic and Policy Research based in the nation's capital, has other comments about the Fed's figures.
"The data are very erratic," Baker said. "The big jump in revolved debt in May (mostly credit card) that was partially reversed in June was most likely an anomaly."
May's annual growth rate of revolving credit was 8.2 percent, compared with June's rate of 4.9 percent. Revolving credit lets borrowers access money as they need it, and to make payments on the unpaid balance over time.
"There is some slowing in nonrevolving credit (cars and student loans)," according to Baker.
May's annual growth rate of nonrevolving credit was 4.9 percent, compared with June's rate of 3.5 percent. With nonrevolving debt, a borrower pays an agreed-upon amount between debtor and creditor when a loan begins, according to a monthly schedule until the entire sum is paid off.
Consumer borrowing partly drives spending. More broadly, consumption accounts for about 70 percent of the U.S. economy, a major part of the global system.
What about wage-driven buying power? In July, "the average hourly earnings for all employees on private nonfarm payrolls rose by 9 cents to $26.36," according to the federal Bureau of Labor Statistics. For the past year, however, average hourly earnings rose 2.5 percent, a total of 65 cents.
Typically, when the unemployment rate drops, hourly earnings rise, as the dwindling supply of job-seekers compel employers to hike wages to attract new hires. The jobless rate of 4.3 percent in July 2017 compares favorably with the 4.9 percent rate of unemployment in July 2016, the BLS reports.
And the stock market? The Dow Jones Industrial Average recently hit 22,000 — an all-time high — which Trump praised as proof of his economic stewardship during the past six months.
Some investors' expectations that Apple Inc., one of the 30 blue-chip stocks that comprise the Dow, will reap robust profits with the release of its new iPhone, in part buoyed the stock market boom, CNN Money reported.
Business is good for America's nonfinancial companies such as Apple, with on-hand cash totaling $1.84 trillion on Dec. 31, 2016, an increase of 9.2 percent versus $1.68 trillion at the end of 2015.
"The top five most cash-flush companies — Apple, Microsoft, Google, Cisco and Oracle — now hold 32 percent of the total, with Apple by itself accounting for 13.4 percent," said Richard Lane, Moody's senior vice president, in a prepared statement.
