Monday, June 7, 2010

Consumer Credit Up Slightly in April on Nonrevolving Credit Growth

The Federal Reserve reported that consumer credit increased at an annual rate of 1/2 percent in April 2010. This negligible increase in consumer credit indicates that household balance sheets are still suffering from the worst financial and economic strain since the Great Depression.

Revolving credit decreased at an annual rate of 12% in April. This is the 19th straight monthly decline. From a year ago, revolving credit was down 9.6% and down 14.1% from its peak in September 2008. Seeking greater financial stability, households have reduced revolving credit borrowings.

However, on a positive note, nonrevolving credit increased at an annual rate of 7% in April and has increased in four of the last five months.

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