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Rossman also warned that delinquencies could rise in first half of 2021.
Earlier this month the Federal Reserve said credit card borrowing fell 6.7% and outstanding balances on credit cards are down about 11% compared with their level in February, before the pandemic escalated.
Economic growth has slowed since the quick rebound in the July through September quarter with U.S. consumer spending increasing modestly in November as household incomes failed to rise for the first time in nine months, according to Reuters.
Last week, the Commerce Department said consumer spending, which accounts for more than two-thirds of U.S. economic activity, increased 0.2 percent after an upwardly revised 0.4 percent increase in October. Consumer spending increased at a 3.0 percent annualized rate in the July through September period.
Consumer confidence fell last month, according to a survey by the Conference Board, which potentially discourages spending in the coming months as COVID-19 cases across the country have been increasing and more lockdowns to curb the spread are anticipated.
The personal saving rate has increased dramatically since February, which data from the Federal Reserve Bank of St. Louis shows was a seasonally adjusted 8.3% and shot up to 33.7% in April. The personal saving rate was 12.9% in November.
Rossman said on Thursday that he thinks the data “goes to show that a lot of the first round of stimulus has really worn off at this point.”
“We’re getting a more cautious consumer in this holiday season,” he continued. “We saw retail sales fall a little bit in both October and November. People are holding their purse strings a little bit tighter these days.”
He noted that once there is “wider vaccine availability” he anticipates an increase in travel, entertainment and other discretionary spending due to pend up demand.
“I think 2021 could look a lot better especially the second half of the year, but we need to get there first and bridging that gap for that next six months or so, that’s the challenge,” Rossman noted.
He also pointed out that some people have been “living comfortably” during the pandemic as they have been working from home, saving money on commuting, and perhaps “didn’t take a big vacation this year.”
“Those are the kind of people that have extra money to spend and some of its going to debt payoff, some of its going to home renovations, some of its going to at-home exercise equipment,” Rossman said.
“The people that we worry about are those that have been out of work for a while or their income is still greatly reduced, these are the people that I really think need these stimulus programs and perhaps even more than one round.”
“I think even this recently approved round, we’ll see if the president signs it, but even that may not be enough,” he went on to warn.
On Thursday, House Republicans and Democrats blocked each others' "unanimous consent" requests put forward after President Trump aired grievances Tuesday night to the massive coronavirus stimulus and government funding package lawmakers sent to his desk.
Trump on Tuesday night released a scathing video in which he called panned $600 stimulus checks for Americans as too small, saying the number should instead be $2,000.
He also demanded that "wasteful and unnecessary" spending – Trump specifically listed foreign aid to several countries, along with a few other line-items – be cut from the year-end spending package which lawmakers married to the coronavirus aid so it could all be passed in one vote.
Rossman noted on Thursday that it is unclear how much longer the coronavirus pandemic and its economic impact will last.
“We don’t know exactly if we’re talking another four months, six months, eight months, but there are definitely people struggling and there’s a fear that these delinquencies may start to rise as we get into the first and especially second quarter of the year,” Rossman said.
According to data from the Federal Reserve, consumer revolving debt – which is comprised mostly of credit card debt – dropped to $979.6 billion in October from $985.1 in September.
Rossman noted that several factors have contributed to the drop in debt.
“A lot of people have made debt payoff a priority and they’ve been spending less,” he said, adding that “a lot of people also have had their credit limits cut unexpectedly.”
He went on to say that many people “have started gravitating to debit cards” and buy now, pay later services.
“Open-ended credit card debt scares them,” Rossman said. “The rates remain high, the average is 16%.”
Fox News’ Tyler Olson and The Associated Press contributed to this report.