September 9, 2009
U.S. consumer credit plunged by a record 21.6 billion dollars, or 10.4 percent at an annual rate in July, the Federal Reserve reported Tuesday.
The decrease, much worse than the 4 billion dollar decline that economists forecast, followed a cut of 15.5 billion dollars in June, or a 7.4 percent annualized drop.
For July, consumer credit in revolving loans, a category that includes primarily credit card debt, plunged by 8.1 percent at an annual rate.
Demand for no revolving credit used to finance cars, vacations, education and other things, meanwhile, was down 11.7 percent.
Many analysts believe that the strength in consumer borrowing will continue to be weak as job layoffs are rising.