Following on the biggest drop on record for household debt in Q3, the Federal Reserve Board this afternoon said consumer credit in November dropped 8.5% on an annualized basis from October’s reading, to $2.5 trillion.
The drop of $17.5 billion was much larger than the $5 billion observers were expecting and the 10th straight month-over-month decline. It was also the biggest drop on record since they started tracking these things in 1943, writes Dow Jones Newswires’s Jeff Bater.
The vast bulk of that came in revolving credit lines, mostly credit cards, which dropped 18.5%.
Equity markets continued in a general downdraft on the news, with the Dow down 25 points at 10,581 and the S&P 500 Index down 19 points at 1,141. The Nasdaq composite, however, rose 14 points to 2,314.
Stocks of large card issuers were already down before the report, and showed no immediate reaction. Capital One Financial (COF) was off 75 cents, or 1.8%, at 42.08, Discover Financial Services (DFS) was down 9 cents, or 0.6%, at $15, and Bank of America (BAC) was off 20 cents, or 1.2%, at $16.73.
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