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- Consumer credit: Falls for a record eighth month in a row, $14.8B in September to $2.46T, 4.7% below the year-ago figure. Economists expected a $10B decline. The drop led once again by a decline in credit-card debt, which fell for a 12th month, $9.9B to $889B - a 13.3% annualized rate. Nonrevolving debt fell at an annual rate of 3.7%, $4.9B to $1.57T.
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This news story has 2 comments:
However, comparing total credit outstanding as of the end of Q3 2008 (the apparent peak) of $2.58T with the total credit outstanding as of the end of 2004 of $2.19T (which can be approximated as the onset of "REALLY easy money"), and it can be concluded that credit likely must continue to contract significantly from the $2.46T reported as of the end of September.
$250B may not sound like much as far as congress is concerned, but decreasing credit availability by approximately $833 for every man, woman and child in the U.S. will present a significant headwind against the rebound of the consumer.
I'd bet those with good credit are cutting back; I'd also bet that the irresponsible and those most likely to default on credit card debt are ramping it up.
Not good.