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US: Consumer Credit Unexpectedly Tumbles As Americans Paid Down Credit Cards After Stimulus Ended

Just as US consumer credit appeared to be normalizing, when it rose by a slightly lower than expected $12.250BN in July (since revised to $14.67), something unexpected happened: according to the latest Fed G.19 statement, in August consumer credit tumbled by $7.2BN, far below expectations of a $14BN increase, and the biggest contraction since May.

While non-revolving credit posted one more month of relentless growth, it increased by an unexpectedly weak $2.175 billion to a record $3.159 trillion, suggesting that debt-fueled spending on autos slowed drastically.

But the big surprise was the latest revolving credit – i.e., credit card – print, which reversed the July jump by $14.7 billion and contracted by a whopping $7.2 billion, the biggest drop since May’s $12 billion drop, and brought the total amount of outstanding credit card debt to $985 billion, far below the record $1.099 trillion hit in February.

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