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U.S. Recession: Deeper and Sooner

News out earlier today that indicates to me that the U.S recession will hit sooner and harder than previously expected.

The Federal Reserve reported Monday that consumer borrowing rose at an annual rate of 2.4 percent in February, just half of the 4.9 percent increase in January.

The slowdown reflected much weaker demand for auto loans and other type of non-revolving credit, which rose at a rate of 0.4 percent in February, much lower than the 3.6 percent growth rate in January. Credit card debt rose at a 5.9 percent rate.

Credit is the grease that keeps the economy rolling, and less borrowing means less spending, and less spending will push us further towards the recession that many economists believe we're already in.

Another sign of the worsening economy? Auto repossessions are up:

Massive jumps in payments on home loans and an economy that's taking a beating are creating work for auto repossessors, say those who lend money on vehicles, take them back and study the trend.

Individuals in the repossession, finance and research businesses say repossessions are taking place in large numbers because in some households, higher mortgage payments and other credit difficulties are eating up the money that ordinarily would be used for car-loan payments.

Tom Kontos is vice president of Adesa Analytical Services, a unit of with Adesa Corp., which owns auto auctions in Mira Loma and San Diego. He said repossessions are up about 15 percent from last year.

I'm reminded of the moment in one of the Republican debates when Fred Thompson was asked if he believed the nation was sliding towards a recession, and he assured us it was not. I think it was Mitt Romney who then opined that it was a shame that Michigan was experiencing a 'one-state' recession, with the implication that it was only Michigan.

Republicans are quick to point out the official definition of a recession is "a recession is a decline in a country's real gross domestic product (GDP), or negative real economic growth, for two or more successive quarters of a year," and technically their definition is correct. Tell that to the folks who are already losing their houses, cars, jobs, etc...

This will mark the second George W. Bush recession -- the first occurred March 2001-November 2001 following a long period of growth and expansion shepherded by the Clinton administration.

Clinton administration - 0 recessions.
GW Bush administration - 2 recessions.

Bush isn't sitting on his hands, however.

Meeting Monday at the White House with owners of small and medium-sized businesses, President Bush said the economy was going through a "rough time" but he was confident things would turn around. He urged lawmakers contemplating passage of a second economic stimulus measure to allow more time for the first $168 billion package to work.

"Give this one a chance to work," Bush said during the meeting with business executives including those in the orchard, meat packing and large equipment industries.

He said experts were telling him that the stimulus package would boost overall economic growth by between 1 percent to 1.5 percent later this year.

Note: Wizbang Blue is now closed and our authors have moved on. Paul Hooson can now be found at Wizbang Pop!. Please come see him there!

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