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Economy in Brief

U.S. Consumer Credit Growth Revives
by Tom Moeller  May 7, 2012

Consumer credit outstanding returned to the fast growth track during March. It increased $21.3B (AR) following a $9.3B February gain, initially reported as $8.7B. A $10.0B increase had been expected by Action Economics. It raised credit usage by 5.0% during the last twelve months and at a 7.9% annual rate during the last three.

In a sure sign of an improving economy, non-revolving credit usage, which accounts for nearly two-thirds of the total, jumped another $16.2B (6.8% y/y) in March and at an 11.9% rate during the last three months. Loans by the federal government to students rose 29.6% y/y. Loans by commercial banks rose 3.6% y/y, loans to nonfinancial business rose 2.2% y/y and credit union borrowing gained 1.9% y/y. To the downside, savings institution lending slipped 0.5% y/y, pools of securitized assets were off 1.8% y/y and finance company lending dropped 3.6% y/y.

Consumers' revolving credit balances gained $5.1B (1.4% y/y) during March but slipped at a 0.1% annual rate during the last three months. Credit issuance by savings banks rose 16.1% y/y, finance company lending increased 5.8% y/y while credit union loans gained 4.0% y/y. Pools of securitized assets were off 2.4% y/y, commercial bank lending slipped 0.3% y/y and nonfinancial business credit remained unchanged y/y.

During the last ten years, there has been a 52% correlation between the y/y change in credit outstanding and the change in personal consumption expenditures, although the correlation recently has weakened considerably. The credit figures are the major input to the Fed's quarterly Flow of Funds accounts for the household sector.

Dealing with the impact of manufacturing job losses in the Midwest from the Federal Reserve Bank of Chicago is available here.

The consumer credit data are available in Haver's USECON database. The Action Economics figures are in the AS1REPNA database.

Consumer Credit Outstanding
(M/M Chg, SAAR)
Mar Feb Jan Y/Y 2011 2010 2009
Total $21.3B $9.3B $17.5B 5.0% 3.6% -1.7% -4.4%
  Revolving 5.1 -2.3 -3.0 1.4 0.4 -7.5 -9.6
  Non-revolving 16.2 11.6 20.4 6.8 5.1 1.5 -1.2
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