Consumer Credit/Belt tightening continues

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.

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