Consumer credit continues to decline.  There are two reasons for this.  The first is banks are reducing credit limits and squeezing any customer they view as possibly risky so they can reduce their risk.  The second reason is that consumers are not borrowing as much and are reducing their debt loads.  Jobs continue to contract either through lay-offs or reductions in hours.  “Only” 250,000 jobs were lost in July.   Because consumer spending is a major driver of the economy this is an obvious leading indicator of the continuing difficulties in the economy that are going to affect us all for a significant period of time.  See the following article for a graph of the contraction in consumer credit.

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