Overall consumer credit fell in May by 4.5 percent, and April’s slight increase was adjusted to reflect a significant decline – more indications of an American public consumed with lowering debt or unwilling or unable to increase borrowing.
The Federal Reserve’s May update also marked the 20th consecutive month of a decline in credit card balances, down 10.5 percent, or $7.4 billion, for a total of $830.8 billion.
Non-revolving credit – covering auto, truck and personal loans, decreased 1.4 percent – or $1.8 billion, for a total of $1.584 trillion.
Overall credit fell 4.5 percent, or $9.1 billion, to $2.415 trillion in May. The Fed’s report does not cover real estate-secured loans such as mortgages and home equity loans.
Last month, the Fed reported a slight increase in both revolving and non-revolving credit – enough to spur some optimism that consumer spending might rebound and help revive a faltering recovery from the deepest recession in decades.
April’s overall consumer credit was revised to reflect a 7.3 decrease.
The slide in borrowing is reflected in consumer spending sluggishness. Spending by Americans increased 0.2 percent in May after a flat April, the Commerce Department reported recently. While slightly above expectations of 0.1 percent, personal savings reached the highest level in eight months.
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