Consumer Credit outstanding fell a greater than expected $17.5b m/o/m in Nov vs an estimated drop of $5b and follows a revised $4.2b decline in Oct. It is the 13th month of the last 14 that has seen a reduction and is the biggest monthly drop ever. The decline was led by a sharp 18.5% annualized drop in revolving credit which consists mostly of credit cards. Nonrevolving credit outstanding fell 2.9% annualized and is made up mostly of auto loans. Total consumer credit outstanding now stands at $2.464T, the lowest since July ’07 and has fallen $117b from the record high in July ’08. To put the last decade of credit growth into perspective, nominal personal consumption rose 55% (same increase as overall GDP) while consumer credit rose 61% over the same period. Thus, highlighting how dependent on credit the US became rather than on savings in generating growth.
Biggest monthly drop in consumer credit outstanding ever
January 8, 2010 3:26pm by
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