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Economy in Brief

Consumer Credit Growth Under Wraps
by Tom Moeller February 9, 2009

The Federal Reserve reported that consumer credit outstanding rose just 1.7% during all of last year. That growth in U.S. credit usage was its lowest since 1993. The slowdown was led by revolving credit outstanding (credit cards), which fell $6.4 billion during December and the year-to-year growth of 2.6% was its lowest since 2004. Yearend, however, the three-month change was quite a bit weaker. It plummeted to -5.3%, a record rate of decline.

A $6.6 billion December decline in overall consumer credit outstanding followed a downwardly revised $11.0 billion November drop, reported last month as an $8.0 billion decline. These latest declines pulled the three-month growth in credit outstanding to -3.0% (AR) which was the lowest since the recession of 1990-91.

Non-revolving credit (autos & other consumer durables), which accounts for nearly two-thirds of the total, grew just 1.2% last year and in December it dropped for the fourth month in the last five.

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.

The Federal Reserve Board on Friday released additional terms and conditions--including loan rates and collateral haircuts--of the Term Asset-Backed Securities Loan Facility (TALF). The Fed's release can be found here.

Raising the credit bar, or getting clubbed by it? from the Federal Reserve Bank of Minneapolis is available here.

Consumer Credit (m/m Chg, SAAR) December November Y/Y 2008 2007 2006 
Total $-6.6B  $-11.0B 1.7% 1.7% 5.5% 4.5%
  Revolving $-6.4B $-6.9B 2.6% 2.6% 7.4% 6.1%
  Non-revolving $-0.3B $-4.2B 1.2% 1.2% 4.4% 3.6%
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