Consumer Deleveraging Continues

The Fed released its report on consumer credit, and it comes as no surprise that revolving credit eased for the 26th consecutive month as consumers continue to shed credit — either by paying it down or, in some cases, walking away from it.  From a high of $973.6 billion in August 2008, revolving credit has contracted by $173.1 billion to $800.5 billion (a level last seen six years ago, in December 2004).  It is an annualized rate of decline of about 17.75%.  Nonrevolving credit has been flatlining over the same period:

Correction: Thanks to Ron Griess for pointing out some sloppiness in my post:  The 17.75% decline to which I referred is not the annualized rate of decline — it is the peak-to-now overall decline.  The annualized rate of decline, as Ron correctly points out, is -8.64%.  I apologize for the sloppiness.  My mind is apparently already on vacation.  Thanks, Ron.

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