The effect of the Consumer Credit report on the market is muted at best. What the report does give us is an insight into the U.S. consumer. One of the main stories coming out of the 2008 financial crisis was an over-leveraged U.S. consumer starting to de-leverage themselves. Excluding the mild rise in consumer credit during September 2010, we continue to see a U.S. consumer reducing their debt, especially their revolving/credit-card debt.
One of my concerns from the Personal Income and outlays Report was the rise in consumer spending coupled with declining disposable income. Did this mean that the U.S. consumer was back to saving less and borrowing more? What we see from the Consumer Credit report is that this isn’t the case. The U.S. consumer, which could be saving more, is still saving at rate slightly higher than 5% and the U.S. consumer is reducing their revolving debt load.
