Consumer credit fell in July for the first time in nearly a year as Americans reduced credit card debt, a worrisome sign for an economy that has struggled to create jobs.
Consumer credit shrank by $3.28 billion in July, the Federal Reserve said on Monday. That was well below the $9.1 billion advance Wall Street economists had forecast in a Reuters poll.
However, in a more positive sign, the Fed revised substantially higher its estimate for credit growth in June.
The data follows a report on Friday that showed U.S. jobs growth slowed sharply in August, setting the stage for the Federal Reserve to pump additional money into the sluggish economy as soon as this week.
Some analysts said concerns over the shaky economy might be making Americans less willing to run up debts - or creditors less willing to give them loans. "It may be the case that consumers and lenders were becoming more tentative over the summer," analysts at Credit Suisse said in a report.
Credit has been expanding almost continuously since mid-2010 as the country recovered from the 2007-2009 recession. The decline in July was the first drop since August of last year.
Read more: http://www.reuters.com/article/2012/09/10/us-usa-economy-credit-idUSBRE88913Y20120910
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