The Latest Consumer Credit Data Spotlights The Weakest Part Of The Economy

You hear a lot about how companies may pull back on investment due to the fiscal cliff, and that’s clearly an issue, but…

The data suggests that the consumer is a big worry spot.

Today’s consumer credit number came in way weaker than expected, and revolving consumer credit (credit cards) actually shrunk sequentially.

Here’s a chart of the year-over-year change in non-seasonally adjusted revolving credit. As you can see, the year over year growth rate is still positive, but the growth is shrinking fast.

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And to drive home the point that this is a trouble spot, here’s a look that same YOY change in consumer credit number vs. the year-over-year growth rate in retail sales. Both are deteriorating.

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Photo: FRED

Again, both remain positive year-over-year. And there is always noise in these sequences. But you can’t be happy if this develops into more of a trend.

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