Consumer Credit outstanding on a seasonally adjusted basis in August fell by $12b, $2b more than expected but July didn’t fall as much as initially reported by $2.6b. It’s the 10th month in the past 11 that has seen declines. Revolving credit (mostly credit cards) fell by $9.9b and nonrevolving fell by $2.1b, a sharp improvement from the $16.6b drop in July and $10.6b in June but that is mostly due to the clunker program. The total amount outstanding at $2.46t is the lowest since July ’07. A thriftier consumer, debt paydown, cut credit lines and rising unemployment are all combining to reduce the use of consumer credit to purchase things.

Category: MacroNotes

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2 Responses to “Consumer Credit/Belt tightening continues”

  1. Pat G. says:

    I am not sure the cause is either because consumers are weary of taking on more debt or the banks are weary of lending to consumers. It’s probably a little of both. Now, if only the USG could learn from the consumers’ example. This country really is bass ackwards.

  2. crosey says:

    I love to see leverage dropping. Our future should be built on the foundation of our ability to save money, not borrow money.