June 4 (Reuters) – Americans are borrowing more, renting
more rather than owning, eating in restaurants more and saving
less, leading inevitably to questions of sustainability.
That’s true both for Americans and for the corporations
whose profits they create.
What’s more, the kind of financing backing all this
indicates that a goodly bit of the balance sheet straining
activity is concentrated lower down the income and wealth scale.
Juxtapose this with vertiginous rates of corporate profitability
(and intriguing hints that a top may have been hit) and you have
the making of some serious upcoming tests for the economy and
First, let’s look at Americans and their cars. A record 27.9
percent of all new car sales so far this year were leases,
according to Edmunds.com, while those who did decide to buy did
so with record-long loan terms of 66 months on average.
Interestingly, leasing, which historically has been
associated with high-earners in tony metropolitan areas (think
real estate salespeople in California) has been spreading both
geographically and down the income table. (here)