Consumer credit keeps going lower and lower in the U.S. The Fed reported that June’s credit was down 0.7% on a seasonally adjusted basis with a $1.3 billion drop down to $2.42 trillion. We had penciled in consumer credit losses being expected of about $5.2 billion.
Revolving credit, i.e. credit cards, dropped by another $4.5 billion to $826.48 billion. If we get two more months of that, there will have been two years without an increase in a monthly reporting.
The non-revolving credit did actually show a gain which is tied to cars, school, vacations, and other larger ticket items.
The silver-lining in the report was that May’s credit destruction was not as bad as previously thought. The original $9.1 billion drop was revised to a drop of $5.3 billion.
Who knows, maybe a smaller credit drop and the May revision can be considered a good thing on an apples-to-apples basis. A weak jobs situation and a very uncertain consumer are not exactly giving the greatest recovery we would have hoped for. Maybe we’ll just keep having to settle for “less bad is good” in the months ahead.
JON C. OGG
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