Consumer Credit in US Unexpectedly Falls $3.28 Billion in July

A credit card, the biggest beneficiary of the Marquette Bank decision (Photo credit: Wikipedia)

Consumer Credit in US Unexpectedly Falls $3.28 Billion in July Bloomberg Consumer borrowing in the US unexpectedly decreased in July for the first time in almost a year, restrained by a second straight decline in credit-card debt.
The $3.28 billion drop followed a revised $9.8 billion jump the previous month that was bigger than first estimated, the Federal Reserve said today in Washington. Economists projected a $9.2 billion rise, according to the median forecast in a Bloomberg survey. Revolving credit, which includes credit card spending, decreased $4.82 billion, the most since April 2011. The drop in credit-card borrowing coincides with a slowdown in hiring this year and a rise in consumer pessimism that indicate households are wary of taking on debt. Employers added fewer workers to payrolls than forecast in August, while a gain in average hourly earnings from a year earlier matched the smallest increase since records began in 2007.
“Households are definitely still in deleveraging mode, they’re hesitant to take on new debt,” said Ryan Wang, an economist at HSBC Securities USA Inc. in New York. “I think credit card debt is going to be flat to up slightly, and mortgage balances are still falling.”... Continue to read.

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