Consumer Credit and Loans: A Chilly Forecast
During the past two years, as the economy has deteriorated, U.S. consumers have been spending less and less—in our view, partly because their access to credit has dried up. In the wake of rising unemployment, collapsing housing prices, and the foreclosure crisis, many banks and other lenders appear to have tightened standards for granting credit-card, home equity, auto, and other consumer loans. Consumer debt has declined markedly from its peak two years ago as the nation's economic woes have generally caused the consumer to save more and borrow less.
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