CONSUMER CREDIT PLUNGES IN APRIL
5 June 2009 by Cullen Roche
1 Comment
Total consumer credit fell $15.7B in April. This was twice as much as analysts expected and the March revision was a staggering $16.6B. This was the largest drop since the Fed began tracking consumer credit. Total consumer credit outstanding is $2.52T. It’s very hard to imagine a sharp economic rebound with the consumer on the ropes like this. As we’ve mentioned before the reflation trade is certainly beginning to show some chinks in the armor.
If I remember correctly, the 1982 rally in March to June was caused by an increase in consumer credit, meaning that the consumers began to spend more. Now that consumer credit is contracting, there goes that comparison to the 1982 rally.