Credit Crunch Puts Pinch on Savings: Malpass

Today’s consumer credit report is expected to show that the economic slowdown caused consumers to borrow less readily in June, but David Malpass, president of Encima Global, disagreed.

People are simply shuffling around their credit card use, racking up more purchases on everyday items such as gas, and reducing additions to their savings and 401(k)s, he said.

"The big thing in '02, '03, '04, '05 was people were piling new money into financial assets," Malpass said. "Now they pull back on that and maintain a pretty even keel on consumption."

He expects to see consumer resilience even after rebate checks are used up, despite Wal-Mart Stores and Target’sdisappointing same-store sales reports. He said the biggest risk to healthy consumer credit is jobless claims, which hit their highest level in six years earlier today.