The Columbia SC economy is full of them –– older Americans who collectively have more debt than ever before. Baby boomers who've lived in the generation of rising housing prices, more expensive cars, and the staggering cost of higher education, now find themselves nearing retirement owing money. Recent data released by the Federal Reserve Bank of New York says the average borrower aged 65 has 47% more mortgage debt and 29% more auto debt than the same age borrower in 2003 (after adjusting for inflation).

Columbia SC Economy and Baby Boomer Debt

Less than ten years ago student debt was unheard of to most people 65 or older. Today it's one of the largest debt categories, though not as large as mortgage debt, auto loan debt and credit cards. Of course, there are more people aged 65 than ever. This phenomenon has resulted in a change in the make-up of household debt in the U.S. Before the housing crash, younger households assumed greater debts that became unaffordable when the economy worsened. According to one New York Fed economist, "The shift represents a reallocation of debt from young people, with historically weak repayment to retirement-aged consumers, with historically strong repayment."

Statistically, older borrowers have been careful not to default on their loans and are more diligent at lowering their overall debt. However, more borrowing by the older generation could signal problems if they enter retirement with unmanageable debt. For now that doesn't seem to be happening in the Columbia SC economy. Still, it's worth watching – especially as a larger number of Americans will retire without pensions and limited 401(k) assets. In addition, economists warn that retirees who have Social Security as their sole source of income could struggle with existing debt.

The recent data in the New York Fed's quarterly report on household debt was the result of millions of credit reports compiled by Equifax, a leading credit-reporting agency. The report first began in 2010 to track debt behavior trends of U.S. households in the wake of the financial crisis and the housing crash.

Household debt has risen slowly over the past two years according to the report. However, it has stayed well below the 2008 levels. Overall household debt is estimated at slightly over $12 trillion. Auto debt, student loans and credit cards have increased. Mortgage debt remained largely unchanged.

The percentage of household debt that is delinquent has gradually dropped. The report showed only 2.2% of the mortgage debt was delinquent, the lowest percentage in nine years. Analysts attribute much of the improvement to older borrowers. Most older households with debt have higher credit scores and higher net worths than in the past. They're better equipped to manage their debt in the wake of the financial crisis. Plus, they are better able to take on new debt following the crisis.

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Growth in the Columbia SC economy was sluggish during the last quarter of 2015, contributing to the overall U.S. economy which ended with a 0.7% annual rate. Economists say the slowdown was due, in part, to cautious consumer spending, reduction in businesses making investments and stagnant exports to other parts of the world.

Columbia SC Economy: What's Ahead?

While the fourth quarter results weren't altogether unexpected, they have raised concerns about the future. Still, most economic experts expect a return to more positive results by the end of this quarter.

Government forecasts had predicted 2% annual growth in the gross domestic product (GDP) for the third quarter of 2015. Instead, the economy grew less than half of the anticipated rate, representing the lowest expansion since the first quarter of last year.

Government economists say the disappointing fourth quarter results are temporary and expect GDP growth to return to a rate of 2.5% to 3% by the middle of 2016. Those expectations are based on improved consumer spending and continued job growth. Consumer spending during the last quarter of 2015 dipped to an annual growth rate of 2.2%, down from a 3% rate the previous quarter. Somewhat alarming was the reduction of spending on both durable goods, like automobiles, and nondurable goods, such as clothing. Given the holiday gift-giving season the results were surprising.

Since consumer spending makes up roughly two-thirds of all economic activity, most analysts are looking to strengthening employment growth to bolster the first quarter of 2016. There are concerns that global issues such as China's shaky economy and falling oil and stock prices will continue to adversely impact the U.S.

In addition to consumer spending, a sharp drop in exported goods also contributed to the weakness of the last quarter. A stronger U.S. dollar has increased the price of goods, but made them less competitive in overseas trade markets. Business investment spending also had a negative impact. Falling from a 5.3% annual growth rate to 1.8%, spending on structures mirrored a drastic drop in oil and gas drilling and exploration.

On a brighter note, new home construction enjoyed an 8.1% annual growth rate. That will provide needed housing inventory for spring home shopping in the Columbia SC economy.

The overall growth of the economy in 2015 was 2.4%, equal to the growth of the previous year. Economists predict 2016 will see growth in the 2% range. While some say it's possible we'll see a recession this year, most agree it won't happen.

The Federal Reserve in its most recent meeting issued a cautious look at the U.S. economy. They left interest rates unchanged after having raised short-term rates in December. That could be an indication the Fed is rethinking the planned rate hikes this year. The weakness of economic growth, lower inflation and global economic impact may have gotten the Fed's attention.

Another bright spot was employment growth. The economy added roughly 284,000 jobs per month during the last quarter of 2015, bringing the year end unemployment rate at a low 5%. This, of course, is important because with more Americans working, more are considering purchasing their first home or upgrading to a larger one.

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Many people in the Columbia SC economy say saving money is a goal in 2016. The best way to save is to have a plan. Depending on your stage of life, a savings plan requires specific financial responsibilities and actions. While there's no such thing as a plan that fits everybody's needs, here are some suggestions.

Saving in the Columbia SC Economy

Baby Boomers. If you're a baby boomer, aged 51-69, you're in good company. Your generation comprises over 25% of the total population of the U.S. Baby boomers are typically in better shape financially than most other folks. However, like most boomers, you probably don't have much money in your retirement account. Just 60% of baby boomers report having any money saved for retirement. In addition, most boomers don't have a retirement pension, leaving them to rely almost solely on Social Security.

The Strategy for Baby Boomers?
• Many baby boomers have gone or are planning to go back to work.
• Consider trying to get by on less by changing your lifestyle. For example, is downsizing your home an option?
• Shift your retirement savings into high gear by saving more, faster.
• Make sure your investments are allocated correctly. Statistics show less than half of all baby boomers are satisfied with theirs.
• Consider long-term care insurance.

Gen Xers. Generation X members, aged 36-50, are in the midst of advancing in their chosen professions and are busy raising children. Some are also caring for elderly parents. Their biggest challenge is managing cash. This age group is facing the most expensive years ever.

The Strategy for Gen Xers?
Pay yourself first. Set aside a certain amount of each paycheck and put it in savings. Then pay the bills, household expenses and other obligations that keep the Columbia SC economy healthy. Consider "forced savings" whereby your bank or employer automatically drafts an amount to fund a savings or retirement account. Avoid buying a more expensive home than you can afford. Paying on a big mortgage each month isn't a good idea and will hamper your ability to save.

Millennials. Millennials, aged 19-35, are surprisingly better at managing money than Gen Xers. Perhaps it's because they are concerned about the job market. Many had a harder time finding a job after college than they anticipated. However, millennials tend to make financial decisions "on the fly" and fail to prioritize long-term needs. Retirement – probably because they view it as being light years away – isn't on their radar. They are least likely to contribute to their employer's retirement plan or to open IRAs.

The Strategy for Millennials?
Most millennials rent these days. Managing that cost is most important. Consider living at home a little longer – even after college. Getting rid of student loan debt should be a priority. Consider a loan repayment plan based on your income level. Pay that debt as soon as possible. Be frugal with discretionary income. Set a budget and give yourself a monthly allowance. Failure to do so could result in splurging. Watch your credit score. Since all large purchases will probably depend on a good credit score, make sure you pay your bills on time and not get over-extended in the Columbia SC economy.

With a little planning and financial discipline you can save money at any age. Get started today. You may be surprised how easy it can be to set aside money for when you may need it the most.

Average unemployment in the Columbia SC economy mirrors that of the U.S., remaining steady at 5%. That’s a 7-year low. As the economy has grown, more people looked for employment. Job additions exceeded expectations according to recently-released November statistics.

Job Growth in the Columbia SC Economy

Job gains were solid nationwide, with employers adding 211,000 jobs during November. The construction industry was among the biggest gainers, along with private sector services. While there was weaker growth in temporary employment — even among retailers who employ part-timers for the holidays — analysts say this is a good sign of economic recovery.

The Federal Reserve has maintained interest rates at record lows to aid the economy. Most economists believe the Fed will raise interest rates, perhaps for the second time, during the first half of 2016.

A recent survey of business executives show lowered expectations for profit and growth. This is largely due to increased domestic competition and sluggish growth in the manufacturing sector. Others, however, say a boost in retail spending over the holidays may spur a better outlook for business.

One thing seems certain. If the economy can hold on, the growing trend of Baby Boomers retiring will create future job openings. It is expected there will be more than 50 million job openings in the next ten years. Roughly 30 million of the jobs will be to replace retiring Baby Boomers.

While short-term growth sounds good, analysts are quick to issue a word of caution. They say with the nation's place in an ever-important global economy there are factors that may hurt growth and prosperity. Continued instability in China's economy and the increased threats of terrorism throughout the world may impact possible improvement in the U.S. economy.

Recent statistics show Americans are saving faster than they are spending. The shift in consumer spending habits in the Columbia SC economy began during the most recent recession. The trend looks like it will continue heading into the holiday shopping season and beyond.

The Frugal Columbia SC Economy

Americans saved over $40 billion in October alone. The savings rate grew to 5.6% — the highest level in almost three years. Spending only rose 0.1% between September and October.

According to experts, when the savings rate increases and spending is lukewarm it often means consumers are worried about the economy. That worry means tighter spending. Despite the higher savings rate, it doesn’t necessarily mean consumers fear a recession. The U.S. Commerce Department reported the economy actually performed better than expected during the third quarter, with growth of 2.1% — higher than initial estimates of 1.5%.

Recent trends in the Columbia SC economy show consumers are still spending, but are cautious with their purchases. Experts say they may be saving money for larger ticket items. Spending on smaller purchases is decreasing. Big box retailers like Target and Walmart expect sales this year to be relatively flat.

However, big ticket items do seem to be more popular. Automobile sales in the U.S. reached an all-time high this fall, and the sale of new homes are up over the previous year. Large home improvement stores like Lowe’s and Home Depot report increase in purchases of items costing $900 or more, including roofing material and kitchen counter tops.

This shift could mean homeowners are looking to make improvements to better maintain and add value to their homes. As a result, even when homeowners spend money on their homes — their largest asset — they may be accumulating greater wealth by increasing their home equity through adding value.

The bottom line is the Columbia SC economy is still seeing spending — it’s just more selective and more frugal. And as the saying goes, selective and frugal spending is better than no spending at all.

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