Marketwatch reports:
U.S. consumers reduced their debt in May for the fourth consecutive month, the Federal Reserve reported Wednesday. Total seasonally adjusted consumer debt fell $3.22 billion, or a 1.5% annual rate, in May to $2.52 trillion. Consumer credit fell in eight of the past ten months. The drop in May is the smallest of the group. This is the longest string of declines in credit since 1991. Credit-card debt had the biggest drop in May, falling $2.86 billion, or 3.7% to $928 billion. Non-revolving credit, such as auto loans, personal loans and student loans. fell $367.1 million or 0.3% to $1.59 trillion.
Source: Federal Reserve
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3 comments:
Consumer credit is down but debt to net worth continues to hit record levels.
Debt Levels Chart
Unless we see asset price growth or stronger economic growth, this factor may likely be a drag on future economic growth.
the paradox of deleveraging... too many asset prices (and thus net wealth) are dependent on credit. when credit is taken away from the system, asset prices and wealth fall, but debt levels stay the same (well, at least until they default).
Or Paradox of Thrift as you noted in an earlier post. :)
Jake. You submit nice work on this site.
David
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