U.S. Consumer Credit Fell by $12 Billion in August on Job Losses, Fed Says

U.S. Consumer Credit Fell By $12 Billion in August (Update1)
By Courtney Schlisserman


Oct. 7 (Bloomberg) -- U.S. consumer credit fell in August for a seventh straight month, as banks kept restrictive lending terms in place and job losses made households reluctant to borrow.

Consumer credit fell by $12 billion, or 5.8 percent at an annual rate, to $2.46 trillion, according to a Federal Reserve report released today in Washington. Credit dropped by $19 billion in July, less than previously estimated. The series of declines is the longest since 1991.

Labor Department figures last week showed there were more job cuts than forecast in September and the jobless rate kept rising. The data prompted President Barack Obama to say he’s working to “explore any and all additional measures” to spur growth, and underscored forecasts for the Federal Reserve to keep its benchmark interest rate near zero through next year.

“Demand for credit has just gone through the floor,” said Ellen Zentner, senior macro economist at Bank of Tokyo- Mitsubishi UFJ Ltd. in New York. “Households are in paying- down-debt mode, they’re not in the mode of taking on new debt.”

Economists had forecast consumer credit would drop $10 billion in August, according to the median of 36 estimates in a Bloomberg News survey. Projections ranged from a decline of $15 billion to an increase of $6.2 billion. The Fed initially said consumer credit decreased a record $21.6 billion in July. ............(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601068&sid=axr6fZVcWaAg

i know if i brought my debt down by billions of dollars i would feel so much less encumbered. but somehow it makes it sound like bad news? at work no time to read the whole article

n/t

comes from Asia, I wonder if it's really hurting us.

If you look at a recovery as a return to the old way of doing things...its bad bad news. If you look at a recovery as an irresponsible nation learning its lesson and trying to do things that are more beneficial to it as a nation it is a good thing.

It could also be all the seemingly arbitrary spikes in interest rates cardholders are being hit with...

The hiked mine to 19%, and I hadn't had a late payment with them -ever- for well over a decade of holding their cards.

I called them, paid off in full, and canceled my last two CC accounts on the spot.

I am credit card free, auto loan free, and if I have anything to say about it mortgage free as fast as I can cram every last penny into the principle on my loan.

Fark em, I won't do business with the crooks.

Just finished off the payments on a $2,500 credit card balance I had transferred to a zero-interest card about a year and a half ago.

I'd take on additional debt for an auto loan, but only if I could get a 'killer' deal on a new car, and I'll be looking in about two months or so. I figure that there will be loads of 2009 models left at the end of the calendar year, and manufacturers will do anything to unload them.

If I'm wrong, I sock a couple thou into refurbishing up the 2002 Hyundai, and I cruise in it for another 90,000 miles.