9 January 2009
US Consumer Credit turns down, sharply
This spells depression, not recession. % change from a year ago, free fall.(below)
Jan. 8 (Bloomberg) -- Consumer borrowing dropped by a record $7.9 billion in November as Americans scrambled to boost savings in face of the deepening recession and amid an investor exodus from securities backed by credit-card and other loans.
The slump brought consumer credit down to $2.57 trillion, and capped the first back-to-back monthly decline since 1992, the Federal Reserve said today in Washington. The biggest decrease came in securitized assets, an area where Fed policy makers are creating a new $200 billion lending program to shore up credit.
Today's figures foreshadow a prolonged drop in consumer spending as households try to reduce debt with their net worth declining and job losses accelerating, analysts said.