The worst economic news yesterday was that disastrous consumer credit number: Analysts had expected $8 billion growth, but it actually plunged by $9 billion.
We’re particularly interested in revolving consumer credit, since that’s credit cards which, for better or worse, are a crucial driver of the spending picture.
The first chart is obvious. Consumers are in a deleveraging cycle, as they have been for years. The scary thing here is that there’s so much room below.
And yet on the other hand, here’s the year-over-year, first derivative look. You know, the ‘green shoots’.
Obviously, revolving credit is getting closer and closer to going positive on a year-over-year basis. This was the smallest-year-over-year drop since the collapse began.
So, deleveraging continues, unquestionably, but there are signs that it’s coming to an end.