In a move that defied economists' predictions, American consumer credit fell more than $3 billion in July from June's numbers, according to a Bloomberg report, the first such fall since August of last year. Revolving credit, which includes credit card debt, declined for the second straight month, falling $4.82 billion.
Economists had predicted an increase of more than $9 billion for the month, according to Bloomberg a survey. Despite the looming shadow of the fiscal cliff and a shrinking labor participation rate, non-revolving credit -- such as that used for college and car loans -- increased slightly, though not enough to push borrowing positive.
Investors in major credit card companies Visa (NYS: V) and MasterCard (NYS: MA) didn't seem particularly perturbed by the news, as both traded in the high area of their 52-week ranges. Shares of Visa were down less than 1% Monday, while MasterCard's stock recorded gains of just under 1%.
Total credit card debt has declined more than 22% since 2008, according to the Federal Reserve.
Perhaps today's consumer credit report shouldn't be too shocking in light of the poor economic climate, with the so-called U6 rate of total unemployment -- including marginally attached workers and part-time workers restricted from greater employment due to economic reasons -- hovering above 10% for all but three states in the second quarter of 2012.
The article U.S. Consumer Credit Declines in July originally appeared on Fool.com.
Fool contributorDan Carrollholds no positions in the stocks mentioned in this article. The Motley Fool has adisclosure policy. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.