The latest consumer credit data from the U.S. Federal Reserve suggests that lending continues to be tight and consumer spending remains sluggish.
U.S. revolving credit, 98% of which is credit card debt, decreased 1.09% in August, to $899.4 billion from $909.3 billion the previous month, according to the Fed's G.19 report on consumer credit.
Total seasonally adjusted consumer credit outstanding, which includes revolving and nonrevolving credit, decreased at an annual rate of 5.75% in August, to $2.46 trillion, the report states.
Charge-offs on prime credit card portfolios in September reached 11.52% of outstanding receivables, 97 basis points higher than the previous month's 10.55% (CCR Newsline, 10/2). A basis point is one-hundredth of a percentage point.
"Overall stress on consumers remains high and employment trends are still weak," Michael Dean, Fitch Ratings' managing director, said in the report. "As a result, charge-offs will remain elevated until we see improvement in the unemployment rate and more meaningful declines in delinquencies."
Delinquencies in excess of 60 days continue to fall with Fitch's Delinquency Index decreasing to 4.06%, 20 basis points lower than 4.26% in the previous month. However, Fitch says delinquencies in excess of 30 days have not shown similar improvement and remain elevated around 5.5%.