{"id":156776,"date":"2010-01-08T16:38:42","date_gmt":"2010-01-08T21:38:42","guid":{"rendered":"http:\/\/blogs.wsj.com\/economics\/2010\/01\/08\/consumer-credit-is-shockingly-weak\/"},"modified":"2010-01-08T16:38:42","modified_gmt":"2010-01-08T21:38:42","slug":"consumer-credit-is-%e2%80%98shockingly-weak%e2%80%99","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/156776","title":{"rendered":"Consumer Credit Is \u2018Shockingly Weak\u2019"},"content":{"rendered":"

It\u0092s not a great day for economic news. First there was the grim jobs report. And now a much worse than expected drop in total outstanding consumer credit. It fell by $17.5 billion, or at an 8.5% seasonally adjusted annual rate, the Fed said Friday.<\/p>\n

The sharp decline surprised economists, who expected about a $5 billion decline.<\/p>\n

\u0093This was a shockingly weak report, as it suggests that the deleveraging process taking place among U.S. households continued unabated,\u0094 Millan L. B. Mulraine<\/strong> of TD Securities<\/strong> wrote in a note to clients. “The continued decline in credit remains the most serious risk for the economic recovery.\u0094<\/p>\n

To be sure, consumers had to deleverage after overextending themselves but there\u0092s still no sign of relief. With consumer spending responsible for 70% of demand in the economy, a continuing drop in Americans\u0092 access to and affinity for credit is a bad sign for growth.<\/p>\n

Revolving credit fell at an 18.5% annual rate as consumers shied away from their credit cards or found credit was no longer available. More than a third of banks in the Fed\u0092s October Senior Loan Officer Survey<\/strong> said they were decreasing lines of credit to existing credit card customers. None of the banks said they were increasing lines of credit.<\/p>\n

A third of banks also said demand off all types of consumer loans was weaker. Just 9.4% of banks said they\u0092d see a stronger demand for such loans. Nonrevolving credit — loans for things like vacations, boats and vehicles — also declined at a 2.9% annual rate.<\/p>\n

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It\u0092s not a great day for economic news. First there was the grim jobs report. And now a much worse than expected drop in total outstanding consumer credit. It fell by $17.5 billion, or at an 8.5% seasonally adjusted annual rate, the Fed said Friday. The sharp decline surprised economists, who expected about a $5 […]<\/p>\n","protected":false},"author":850,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-156776","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/156776","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/850"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=156776"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/156776\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=156776"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=156776"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=156776"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}