Another economic indicator comes in weaker than expected, throwing more cold water on the economic recovery theory. Consumer credit increased in February 2012 at the slowest pace in four months, coming in at only $8.7 billion for the month. Estimates were for a $12.0-billion rise! I want to focus on revolving consumer credit, which mostly measures the amount of credit card debt in the U.S.—a better reflection of consumer spending , as it removes student loans and car loans from the numbers. The latest numbers from the Federal Reserve show that credit card borrowing was down $2.21 billion in February and down $2.95 billion in January. Economists were expecting a rise in credit card debt—consumer spending—for both months, which makes this a significant miss and once again puts the economic recovery into question. Thus far in 2012, credit card growth is contracting, not expanding, which means there is less consumer spending. Of important note, this was the largest drop in a year in consumer credit, which means that the pace of slowing consumer spending is accelerating. Since the crisis began, consumer credit has yet to return to 2007 levels. Consumer credit is currently 18% below that level! Since consumer spending is 70% of gross domestic product (GDP), this does not bode well for the economic recovery many people say we are experiencing in 2012. Consumers are either paying down existing debt, are unable to afford to expand their credit card debt because of the poor jobs market, or are not confident enough in their near-term prospects to take on new debt through consumer spending. I would further argue that, with real disposable income falling, consumer spending has no choice but to contract, because incomes are not keeping up with inflation. These contracting consumer credit numbers further confirm this line of thinking. Let’s not forget that, against the backdrop of contracting consumer spending, student loans outstanding are over $1.0 trillion for the first time in American history. Car loans also continue to expand at a rapid rate. I’m that concerned student loans and car loans are too easy for students and consumers to get in 2012. With the difficult jobs market, many students hope an education will better their job prospects, so they are forced to return to school with a student loan. Car loans at almost zero interest rates are another way to make a consumer feel wealthy and maintain consumer spending habits. However, if true wealth is not being created through an economic recovery, how can such consumer spending be maintained? Consumer credit card debt is contracting, which illustrates how weak consumer spending is and how weak this economic recovery is. Just because it is …