U.S. consumer credit plunged in May and was revised down sharply for the prior month, suggesting Americans are still leery of taking on new debt despite rock-bottom interest rates.
The Federal Reserve said on Thursday total outstanding credit to U.S. consumers, everything from car loans to credit cards, fell $9.15 billion, much sharper than forecasts for a $2 billion decrease. April's reading was revised to a hefty $14.86 billion drop from the originally reported rise of $1 billion.
Consumer credit peaked around $2.58 trillion in July 2008, just before a worsening of the credit crisis brought down financial giants like Lehman Brothers and American International Group Inc. Since then, it has dropped by more than $160 billion.
Revolving credit, mainly credit card accounts, was down $7.32 billion, while non-revolving loans for things like cars, boats and a college education fell $1.82 billion.