Stock Ownership Rate Plunges as Credit Card Debt Soars

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Published : January 31st, 2018
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Category : Opinions and Analysis

The savings rate is at a 12-year low. Revolving credit is at a record high and the stock ownership rate has plunged.

Stock Ownership Rate Collapses

One way to support consumption is to sell your stocks. Many did just that.

Here's the Gallup question: Do you, personally, or jointly with a spouse, have any money invested in the stock market right now -- either in an individual stock, a stock market fund, or in a self-directed 401(k) or IRA?

Ownership Distribution

Heading into retirement, only 54% of those 65 or older own "any" stocks, down from 62% in 2008.

The stock ownership rate of those making less than $75,000 plunged 13 percentage points to 54%.

I suspect the 50% line is near $70,000. Those making less struggle to save.

Also, note the disturbing rates for blacks and Hispanics.

Revolving Credit

In January, revolving credit made a new record high.

Meanwhile, the personal savings rate has plunged.

Personal Savings Rate

Undoubtedly, the wealth-effect of housing boosted spending just before the great recession.

I believe a similar thing is happening now.

Personal Savings Definition

Personal saving is defined as personal income less personal outlays and personal current taxes.

Definition Exposes Problem

The definition lumps all the income and all the outlays comes up with a savings rate of 2.6%.

It's falling but at least it's still positive, on average.

However, that revolving debt is not evenly spread. It is concentrated in the bottom half of the population which goes further and further into debt to support consumption.

A 2017 Holiday Shopping Report shows that in November of 2017, 24% of millennials were still paying down credit card debt from Christmas of 2016.

​An increasing percentage of people struggle to save anything as credit card debt soars out of sight.

Yet, former Fed Chair Ben Bernanke tells us there is a "saving glut".

Yeah, right.

Source : www.themaven.net
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Mish 13 abonnés
Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management. He writes a global economics blog which has commentary 5-7 times a week. He also writes for the Daily Reckoning, Whiskey & Gunpowder, and has over 80 magazine and book cover credits. Visit http://www.sitkapacific.com
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