As mentioned by President Bush, economic indicators indeed appear “increasingly mixed.” This statement highlights the concerns of many unsure of where this jittery market will land the economy as we move into a New Year.      

Across the board, news has been foreboding, from last week’s weak jobs report ("Jobless Rate Hits 5 Percent, Market Tanks," Jan. 4), to yesterday’s announcement by KB Homes of further weakening in the housing market throughout 2008. Signs point to economic weakness, as consumers tighten their budgets from concerns about their personal finances and the economy.

Further exacerbating the situation are continuing increases in delinquency rates. The percentage of consumer loans at least 30-days past due rose in the third quarter to 2.44 percent from 2.27 percent from the previous quarter, as reported by a study of consumer borrowing conducted by the American Bankers Association.

But amid the credit-market turmoil and possible recession, fears of slowed consumer spending have yet to be fully realized, thanks in large part to holiday spending.

Following two consecutive months of decline, the Federal Reserve’s recently released G.19 data showed an increase of $6.7 billion or 5 percent in non-revolving debt for the month of November. This is a marked improvement from the $1.64 billion or 1.26 percent contraction seen in October.   

Additionally, revolving debt in November increased by $8.8 billion, or an annual rate of 11.25 percent, with consumer credit on a whole increasing at an annual rate of 7.5 percent ("Credit Card Spending Explodes in November," Jan. 9). 

This indicates the continued use of consumer credit to meet financial obligations, presenting both opportunities and challenges for the ARM industry. 

As consumers find it harder to stretch their budgets, with one out of four households reporting being 30-days or more past due on at least one bill according to a recently released survey by Online Resources Corp., these economic trends are sure to test recovery methods moving into the first quarter.