“We are concerned by the fact that these chicken growers still have not received federal assistance since the start of the COVID-19 pandemic,” lawmakers said in the letter referencing the Coronavirus Food Assistance Program (CFAP) aid. “We recognize that it is challenging to determine how losses and payments should be calculated fairly, given variations in the timing of when growers receive and finish raising their flocks. Still, we encourage you to proceed swiftly with making fair payments.”
USDA has previously indicated the aid was coming, but has said that it has to undertake a rulemaking effort in order to send out the funds.
Sens. Chris Coons, D-Del., and Roger Wicker, R-Miss., and Reps. Steve Womack, R-Ark., and John Rose, R-Tenn., were key signers of the letter.
Washington Insider: Consumer Debt Increasing
Consumer credit use expanded again in April, marking the third monthly increase in consumer debt, according to data from the Federal Reserve.
The $18.6 billion rise in April was driven mostly by increased use of auto and student loans by consumers, basically matching the March increase of $18.6 billion.
Loans for cars and student loans are considered to be non-revolving credit by the Fed, and those increased by $20.6 billion, according to the update for April. And it was a notable increase as it was the biggest since June 2020 when it increased $22.7 billion.
But the area that could be a concern is in the area called revolving credit. That’s where things like credit cards and store cards are categorized. Consumers have again kept their plastic in their pockets as revolving credit levels decreased by $2 billion in April.
This is a continuing trend that has been seen since the pandemic hit last year. In fact, revolving credit is down some 12.2% since the peak in February 2020.
Since February 2020, consumers have only increased their revolving credit three months. That has translated into much higher savings by consumers as they appear to be “spooked” by the pandemic and likely job losses, etc.
This is sort of a double-edged sword. On the positive side, it signals that consumers have paid down their debt levels relative to high-interest-rate credit cards since the pandemic started. That is a plus. And with more money in the bank they are in a more-sustainable position.
But the downside to less credit card use is that consumers are not using their plastic to make large purchases. Often times, consumers have opted to use credit cards to make those bigger purchases and then pay them off over time.
The Associated Press quoted Nancy Vanden Houten, senior economist at Oxford Economics, that consumers remain reluctant to use their credit cards as they have instead used stimulus dollars it appears to boost their spending. But she expects that will change.
“We expect growth in consumer credit will accelerate in the second half of 2021 as consumers dust off their credit cards, and reopenings and better health conditions incentivize stronger outlays,” Vanden Houten said.
The big rise in student loans and auto loans helped to bring total borrowing by consumers to $4.24 trillion in April, 0.4% above the mark of $4.22 trillion set in February 2020.
Another factor at play could be the housing situation. Consumers are finding that the housing market is white hot with it firmly a sellers’ market. Multiple bids for houses are being made when a property comes on the market. And it typically doesn’t last long.
Plus, those homes are selling at higher and higher prices, another factor which may be tempering the willingness of consumers to pull out their credit cards for run-of-the mill purchases.
And the lack of travel is another contributing factor. Without airfare, hotels and rental cars being booked, that is a key way that credit cards get used by most consumers.
So we will see. Consumers are in better shape relative to their credit cards even though total consumer debt is back to pre-pandemic levels. At some point, they will start using those credit cards again and that will bring a further boost in consumer demand, helping to keep the economy moving forward, a situation that needs to watched closely, Washington Insider believes.
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