United States: Does Credit Still Pose Risks to the Economy?

US consumer spending is holding up well despite a number of constraints such as high interest rates. Consumption has proven resilient despite a slowdown in credit, according to the latest monthly data on consumer credit. It’s no surprise that credit is cooling, since financial institutions continue to impose strict credit conditions. But now that savings are running out, could the credit trajectory become cause for concern? If companies keep hiring and wages keep rising, the situation doesn’t pose much of a threat, even though higher-for-longer rates could create more issues.