Consumer Credit Drops Unexpectedly in July

Consumer credit fell in July for the first time in nearly a year as Americans reduced credit card debt, a worrisome sign for the economy. Consumer credit fell at a seasonally adjusted annual rate of 1.5% to $2.71 trillion, the Federal Reserve said. Revolving debt like credit-card borrowing fell for the second month with a 6.8% slide. But the larger nonrevolving category like auto and student loans saw a slowing of the growth rate, down to just 1% from 9.8% in June. The Fed also made a substantial upward revision of data from December 2010 onwards, with June growth reaching 5.3% from a previously reported 3% and May growth of 8.7% from a previous estimate of 7.8%. June’s level of credit was revised up to $2.71 trillion from $2.58 trillion.