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Consumer Credit Takes A Nose Dive

January 8th, 2010 Michael McDonough

Consumer Credit outstanding dived by a record -$17.5bn in November, compared to a revised -$4.2bn decrease in October.  The Bloomberg consensus forecast was anticipating a more moderate -$5.0bn decline. Individual estimates ranged from  -$10.0 bn to a high of -$2.0bn.  Revolving credit credit card balances) fell by -$13.7bn in November compared to a decline of -$7.4bn a month prior.  Nonrevolving credit (auto credit, vacation loans, education loans, etc.) dropped -$3.8bn during the month versus a rise of$3.2bn in October.

This data continues to imply that banks are unwilling to lend and consumers remain hesitant about taking on any new debt.  The bottom line here is don’t look towards at credit cards any times soon as a means to bolster consumer spending.

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