U.S. Consumer Debt Fell In August

Posted By on October 7, 2010

No surprise here, it’s called the prudent man’s rule!  The only problem is the government isn’t leading by example.

Consumer borrowing declined in August as Americans trimmed credit-card balances and remained reluctant to take on more debt as job losses climbed.

Credit declined by $3.34 billion after falling a revised $4.09 billion in July.  This was more than the previous estimate according to a Federal Reserve report released today in Washington. Credit-card debt decreased for the 24th consecutive month.

The unemployment rate increased to 9.6 percent in August, the first gain in four months, and economists project a report tomorrow will show it rose again last month. A lack of jobs is restraining consumer spending, which accounts for about 70 percent of the economy.

“People are spending cautiously and getting their debts down,” said Gary Thayer, chief macro strategist at Wells Fargo Advisors in St. Louis. “It’s holding back the economy, but it’s good for the long-run.”

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