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By Matthew Quinn
Federal Reserve data released on Friday showed consumer credit outstanding fell a record $17.5 billion in November, or an annualized rate of 8.5 percent.
Revolving credit balances, such as credit cards, fell at an annualized rate 18.5 percent, or $13.7 billion.
Non-revolving credit, which includes auto loans and student loans, fell at a 2.9 percent rate.
The data underscores how cautious consumers have come in the current double-digit unemployment environment, especially when it comes to accumulating debt. They have good reason to be. According to data released earlier this week by the National Bankruptcy Research Center, personal bankruptcy filings hit 1.41 million last year, up 32 percent from 2008. That represents the highest level of bankruptcy fillings since 2005 when many people rushed to file before new bankruptcy laws went into effect.
Those carrying debt continue to show considerable strain. The 60+ day delinquency rate on U.S. credit cards reached an all time high of 4.54 percent in November, Fitch Ratings said in a report this week. That surpassed the previous high of 4.45 percent set in June 2009.
But consumers have been showing some signs of life. Same-store sales at U.S. retail chain store rose 2.8 percent in December, the strongest monthly performance of the year, the International Council of Shopping Centers said this week.
Additionally, last week the Conference Board reported that its index of consumer confidence hit a two-year high in December.
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