The opening sessions of the Information Management Network's 14th annual ABS East conference in Hollywood, Florida yesterday, honed in on the deteriorating health of the U.S. consumer, a trend that ultimately threatens performance in the consumer ABS space.
Household net worth has dropped $2 trillion to $56 trillion and household debt is currently at a whopping $14 trillion, panelists said. Revolving credit rose 5.7% from August 2007 to August 2008. This, coupled with the rising unemployment rate, will make for a dismal holiday season for the consumer, a speaker at one of the general sessions said, which will put pressure on consumer-based assets. U.S. retail and food services sales for September were $375.5 billion, a decrease of 1.2% from the previous month and 1% drop from September 2007, according to a report this month from the U.S. Department of Commerce. However, panelists were bullish on the American consumer's resiliency and ability to keep spending even during tough times, which will continue to support retail sales and drive demand for product in the sector.