Consumer Confidential: Happier homes, happier banks, happier 401(k) savers
--The economy may be in a rut, but homeowners are still feeling the urge to feather their nests. Upbeat quarterly results from Lowe's and Home Depot indicate the urge to make improvements is stronger than concerns that the economic recovery is taking it's sweet time in being felt. Lowe's says its fourth-quarter profit rose 39% as shoppers spent slightly more per visit. For its part, Home Depot also reported robust earnings and revenue growth, and raised its earnings outlook. "Consumers continued repair and maintenance projects," Lowe's CEO Robert Niblock told the Associated Press. "They're pursuing great value and great deals."
--The outlook is good for our friends in the banking industry as well. According to the the Federal Deposit Insurance Corp., banks earned $21.7 billion in the fourth quarter, compared with a net loss of $1.8 billion a year earlier. The agency called 2010 a turnaround year for the banking industry. The FDIC also said the number of troubled banks rose to 884 in the quarter from 860 in the third quarter -- the slowest rate of increase to the problem list since the first quarter of 2008. But FDIC Chairman Sheila Bair noted that one reason banks are raking in so much profit is because they're not making as many loans. Maybe they'll soon allow consumers to share a bit of their wealth.
--One upshot of the tough economic times: We're socking more money away for our retirement. A greater commitment to saving, along with a rising stock market, helped push balances in 401(k) plans managed by Fidelity Investment to a 10-year high. An analysis based on 11 million accounts showed the average balance rose to $71,500 at the end of December. For participants continuously active in saving for the last 10 years, average balances rose to $183,100 at the end of last year from $59,100 at the end of 2000. I guess you could say the recession has left a lot of us scared straight.
-- David Lazarus
Photo: Homeowners are spending more on improvements. Credit: Don Bartletti / Los Angeles Times