U.S. Consumer Credit Plummets by Total of $14.80 billion
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According to Reuters.com, the U.S. consumer credit dropped by $14.80 billion in the month of September. This statistic was released by the Federal Reserve and this amount is significantly larger than the total that was predicted by a group of economic analysts when they were polled by Reuters prior to the information being released. The analysts who were polled forecasted a U.S. consumer credit drop of $10 billion, which is $4.8 billion less than the actual drop.
The staggering decrease in consumer credit is a crystal-clear indication that American citizens continue to feel reluctant about spending and that they prefer to attempt to reduce their debt rather than dig themselves an even deeper hole. Forbes.com is reporting that our nation’s total consumer credit has reached its lowest total since June of 2007.
Despite the belief that the economy is no longer in a recession, the U.S. consumer credit drop was largely impacted by the fact that banks have tightened their access to loans. With our nation’s unemployment rate at 10.2 percent, its highest percentage in over a quarter-century, financial experts are predicting that the economic recovery is going to be an incredibly lengthy process.
Chief financial economist Chris Rupkey gave a statement in response to the drastic consumer credit drop, saying, “This is truly an ugly report in what it portends for consumer spending. If consumers are indeed the key to recovery, this economic expansion from the recession could be the weakest and most jobless one yet.”
“This is truly an ugly report in what it portends for consumer spending."
Or one might wonder if this means that US people have finally come to the realization that spending tomorrow's money today is not wise. Instead, save some of today's dollars today and spend only when one has the dollars to pay cash.
I wonder who this guy is the chief financial economist for... the credit card industry?
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Or one might wonder if this means that US people have finally come to the realization that spending tomorrow's money today is not wise. Instead, save some of today's dollars today and spend only when one has the dollars to pay cash.
I wonder who this guy is the chief financial economist for... the credit card industry?