US reduces borrowing
(8 October 2009 – USA) US consumers reduced their borrowing for the seventh straight month in August, as households trim spending and banks reduce credit card limits.
The Federal Reserve data says, outstanding debt owed by consumers fell in August by US$12 billion (A$13.48 billion), a 5.8 percent annual decline.
As a result of job losses, sluggish wages and lower home values, consumers are spending less and saving more. Banks are also reducing the credit limits on millions of credit cards.
Wall Street economists predicted a US$10 billion (A$11.24 billion) decline in August.
The fall in the debt followed an even larger drop of US$19 billion (A$21.35 billion), or 9.1 percent in July.
The majority of the August cut was in credit cards and other revolving debt, which dropped by US$9.9 billion (A$11.12 billion), or 13.1 percent.
Auto loans and other debt fell by US$2.1 billion (A$2.36 billion), or 1.6 percent.
As a result of job losses, sluggish wages and lower home values, consumers are spending less and saving more. Banks are also reducing the credit limits on millions of credit cards.
Wall Street economists predicted a US$10 billion (A$11.24 billion) decline in August.
The fall in the debt followed an even larger drop of US$19 billion (A$21.35 billion), or 9.1 percent in July.
The majority of the August cut was in credit cards and other revolving debt, which dropped by US$9.9 billion (A$11.12 billion), or 13.1 percent.
Auto loans and other debt fell by US$2.1 billion (A$2.36 billion), or 1.6 percent.
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