The Federal Reserve's latest report on consumer credit shows a large fall in October, according to Reuters.
U.S. consumer credit unexpectedly slid by a record $7.20 billion in October, on a big drop in loans taken for cars and boats, a Federal Reserve report showed on Wednesday.
The central bank said total consumer debt outstanding fell 4 percent to a seasonally adjusted $2.157 trillion from a revised $2.164 trillion in September. The rate of decline was the steepest since December 1990, and the dollar drop was the largest fall on record, the Fed told reporters.
Are the Fed rate hikes beginning to bite?
From the previous day's productivity report, the macroblog noted the slow pace of labour cost increase and its implication for inflation. The macroblog also noted that in raising rates on Tuesday, the Bank of Canada had said that inflation "has come down more quickly than expected".
It is probably a trend that is not lost on the Reserve Bank of Australia, which left interest rates unchanged yesterday. Of course, Australia has to contend with a slowdown in GDP growth, with the economy rising 0.2 percent in the third quarter, down from 1.3 percent in the second quarter.
The Reserve Bank of New Zealand, though, has other ideas. Bloomberg reports today:
New Zealand's central bank raised its benchmark interest rate a quarter point to a record 7.25 percent, saying the ninth increase since January 2004 is needed to curb household spending and inflation.
"We remain concerned about the tightness of resources and the persistence of inflation pressures," Reserve Bank Governor Alan Bollard said in Wellington today. "The main driver of the strong demand is household spending, linked to a buoyant housing market."