Automakers are seeing a boost in orders as consumers find the wherewithal to spend. Cars and light trucks sold at a 15.2 million annualized rate in May, making it the sixth month out of the last seven to exceed the 15-million mark -- a level that previously hadn’t been reached since February 2008. Stocks of General Motors Co., Ford Motor Co. and Fiat SpA, the majority owner of Chrysler Group LLC, are all up more than 20% since March.
“Housing has kind of led the way with truck sales,” Kurt McNeil, GM’s vice president of U.S. sales operations, said on a June 3 conference call. “You’re starting to see some positive data from consumer sentiment and consumer confidence. The stock market continues to do well.”
Americans reduced debt last quarter even as the residential real-estate market improved. Today’s report showed household borrowing decreased at a 0.6% annual rate from January to March. Mortgage borrowing dropped at a 2.3% pace, the 16th consecutive decrease. Other forms of consumer credit, including auto and student loans, climbed at a 5.7% pace.
Total non-financial debt increased at a 4.6% annual pace last quarter, led by a 10.3% advance by the federal government and a 5.3% gain among companies. State and local government borrowing rose at a 1.9% pace.
Household finances on the mend are helping consumers meet their loan payments. Mortgage and consumer-loan payments in the fourth quarter accounted for 10.4% of after-tax income, the smallest share in records dating to 1980, according to Fed figures issued in March. The figure peaked at 14.1% in September 2007.
Still, when adjusted for inflation and population growth, household net worth had recovered less than two-thirds of the losses from the recession ended June 2009, according to research from the Federal Reserve Bank of St. Louis. The gauge of inflation-adjusted net worth per household shows 62.8% of the losses had been regained through the first quarter, according to figures issued today.
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