· Is the consumer not attempting to borrow or is credit not being extended by the lender? It's hard to say but the Federal Reserve reported late-Friday that consumer credit outstanding fell by a record $17.5B m/m during November following a $4.2B October decline that was revised slightly deeper from the initial report. The latest was the fourteenth monthly drop since summer 2008. Moreover, the 3.9% y/y pullback in credit outstanding set another historic record as consumers retrenched and took account of debt-laden personal balance sheets along with job market deterioration. Consumer credit outstanding as a percentage of disposable income fell to 22.1% from its 2005 high of 24.7%. Nevertheless, these rates remain up from the low near 16% in 1992. 

· Usage of non-revolving credit (autos & other consumer durables), which accounts for nearly two-thirds of the total, fell $3.8B after a $3.2B October increase. The 0.6% y/y decline reflected a 13.2% drop in pools of securitized assets, an 11.2% decline in finance company lending and a 7.2% drop in nonfinancial business credit extensions. These were mostly offset by the federal government & Sallie Mae which expanded lending by more than two-thirds y/y and commercial bank lending which rose 1.1%. The latter figure, however, was down from 13% growth early in 2008.

· Revolving credit usage fell a record $13.7B during November as part of a pullback that began late in 2008. The latest was part of a 9.3% y/y decline which also was by far a record. Versus November 2009, finance companies lowered lending by 37.9%, commercial bank lending fell 9.8%, pools of securitized assets fell 5.8%, savings institutions pulled back 3.9% y/y. Loans from credit unions offset some of these declines with a 6.2% increase.

· These figures are the major input to the Fed's quarterly Flow of Funds accounts for the household sector.

· Credit data are available in Haver's USECON database. The Flow of Funds data are in Haver's FFUNDS database.

· Why Are Banks Holding So Many Excess Reserves? from the Federal Reserve Bank of New York is available here here.

Consumer Credit Outstanding (m/m Chg, SAAR)

Y/Y

2006 

Total

$-17.5B

 $-4.2B