U.S. Consumer Credit Declines in July

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 (NYSE: V  ) and MasterCard (NYSE: 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.