Proponents of the theory that there has been a secular shift in the American psyche — away for a culture of consumerism and toward a new-found frugality — will be heartened by the latest consumer credit data from the Federal Reserve.
On the other hand, anyone betting on a rebound in US consumer spending or hoping households would power future economic growth are in for a shock.
As Reuters reported on Friday, US consumer credit declined by a bigger-than-expected $14.8bn in September. Analysts polled by Reuters had expected the figure to fall by about $10bn.
As usual, there were revisions to the data for previous months; August’s figures were revised to show a drop of $9.8bn, compared with a previously reported decline of $12bn.
Still, the September numbers mark eight consecutive months of decline, the longest losing streak since the series started in 1943.
Americans cut back sharply on everything from cars to college to credit cards, according to Reuters:
Nonrevolving credit, which includes closed-end loans for big-ticket items such as cars, boats, college education and holidays, fell $4.87 billion, or at a 3.72 percent annual rate, to $1.57 trillion.
Revolving credit, made up of credit and charge cards, dropped $9.93 billion, or at a 13.26 percent rate, to $889 billion, the data showed.
Related links:
US consumers: massive deleveraging in full swing - FT Alphaville
Goldman says not to worry about deleveraging - FT Alphaville
