Even with showing a sharp decline in U.S. consumer credit spending from December, January still showed small gains. Despite a two-decade high of $20.3 billion in December, January numbers stumbled a bit, reflecting a $3.04 drop in credit card spending, offset in the other direction by a $15.1 billion rise in auto and student loans. Even with the month-to-month ups-and-downs, the numbers were still the brightest since August.

Since consumer spending accounts for roughly 70% of all economic activity; the downside is that this spending relies on consumer faith in the economic outlook. Such unforeseen factors as the coronavirus pandemic can knock out the underpinnings of that confidence. With the $4.2 trillion strength of the economy up to this point, many financial pundits see the negative effects as being short-lived. The truth is that we are in somewhat unfamiliar territory; with as many variables as there are at play, only time may be the final arbiter.

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