Total U.S. consumer credit outstanding shrank for a fifth straight month in June in the latest sign of Americans' reluctance to spend when unemployment is high and the economic outlook uncertain.
The Federal Reserve said on Friday that total outstanding credit, which covers everything from car loans to credit cards, shrank by $1.34 billion in June, less than the $5 billion forecast by economists surveyed by Reuters.
That followed a revised decline of $5.28 billion in May credit totals, not as severe as the $9.15 billion decline the Fed originally reported, but still clearly indicating consumers were reining in their spending.
So-called revolving, or credit-card credit, dropped by $4.48 billion in June after a $7.15 billion fall in May — the 21st consecutive month in which credit-card debt decreased.
By contrast, nonrevolving loans that include contracts for items like cars and college loans, rose by $3.14 billion in June following a $1.87 billion increase in May
The total value of consumer credit outstanding at the end of June was $2.418 trillion. That total peaked in July 2008, before a worsening credit crisis brought down financial giants like Lehman Brothers and American International Group.
Recent reports on the economy's performance offer ample incentive for consumers to increase savings and pay down debts if they can do so.
The Labor Department said on Friday that employment fell for a second straight month in July as 131,000 people were slashed from non-farm payrolls.
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