July Consumer Credit

July Consumer Credit fell a much bigger than expected $21.6b vs the consensus of a drop of $4b to a total of $2.47t outstanding. June was also revised lower to a decline of $15.5b from the initial reading of a fall of $10.3b. Both revolving (mostly credit cards) and non revolving (mostly auto’s) credit balances were lower and the overall amount outstanding has now fallen 9 out of the past 10 months. Because the clunker auto program began in late July, this data likely doesn’t reflect the influence on non revolving credit outstanding. Rising unemployment, cut/reduced credit lines, consumer savings and less spending are all the influences on the consumer credit data and the reduction is a secular, long term trend which impacts economic activity in the short term but the extinguishment of debt is what our country desperately needs for the benefit of the long term.

Print Friendly, PDF & Email

What's been said:

Discussions found on the web:

Posted Under