Improvement in Credit
Though credit availability is expected to pick up this year, it will be a slow improvement, according to a new report released by a group of senior bank economists. At the unveiling of their 2010 economic outlook, members of the American Bankers Association’s Economic Advisory Committee said consumer and business lending will recover when other economic factors also show more strength. Debt relief companies continue to look for better credit options for their clients. Bad credit debt consolidation loans have nearly disappeared as the subprime market challenges continue. “Consumers are still retrenching to some extent consolidating debts and small businesses as well are very conservative and reluctant to take on more debt at this point,” said Scott Anderson, a senior economist at Wells Fargo & Co., Mr. Anderson said he expects improvement, “but it’s just going to take some time for that to happen.”
The group predicted 3.1% growth in the gross domestic product. That would be an improvement of 3.4 %age points over 2009 but much more modest growth than the 6% that has followed previous recessions. “I refer to it or characterize it on my own as a ‘half-speed’ economic recovery,” said Stuart Hoffman, the committee’s chairman and the chief economist at PNC Financial Services. He referred to “constraining factors,” such as continued problems in commercial real estate and a lack of confidence in consumer spending, as holding back growth.
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