Consumer credit declined at a slower pace this month. We expect that consumer credit should continue to decline for three reasons. One, credit has been reduced from the supply side by banks. Credit is still more restrictive than a year ago. Two, consumers pay-down debt as they try and restore their balance sheets. Three, if less consumer purchases are made, the overall demand for credit will decline. While some would like to see consumer credit increase to improve the economy, there still needs to be a clean-up of consumer balance sheets.
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