Consumer credit posts record drop in November
WASHINGTON (Reuters) - Consumer borrowing dropped by a record $7.94 billion in November, a Federal Reserve report showed on Thursday, the latest evidence that households were unwilling or unable to take on more credit.
That was the biggest decline since the data series began in January 1943, and was far steeper than the $0.5 billion dip that economists polled by Reuters had expected.
The November decline represented a drop of 3.7 percent, the largest percentage fall since January 1998, when it was down 4.3 percent.
October's credit tally was revised to a drop of $2.78 billion, from an originally reported fall of $3.54 billion.
Non-revolving credit, which includes closed-end loans for big-ticket items like cars, boats, college educations and holidays, fell $5.18 billion, or 3.9 percent, to $1.597 trillion.
Revolving credit, made up of credit and charge cards, fell $2.76 billion, or 3.4 percent, to $973.5 billion.
Banks have been cutting credit lines, canceling unused credit cards and imposing tougher qualifications for loan approval as they try to limit their exposure to consumer debt.
Soaring unemployment has caused more Americans to fall behind on loan payments than at any time since 1980, and delinquencies are likely to head higher, the American Bankers Association said on Wednesday.
A Labor Department report on Friday is expected to show that 550,000 jobs were lost in December, pushing the unemployment rate to 7 percent from 6.7 percent in November, according to a Reuters survey of economists.
(Reporting by Emily Kaiser; Editing by Theodore d'Afflisio)
