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Economy in Brief

U.S. Consumer Credit Growth Eases
by Tom Moeller  June 7, 2012

Growth in consumer credit outstanding is positive, just not like estimated earlier. It increased $6.5B (AR) in April following a $12.4B March gain, initially reported as $21.3B. During the prior four months, increases averaged $15.0B per month. A $10.5B April increase had been expected by Action Economics.

A continued sign of economic improvement was provided by the $10.0B rise (6.6% y/y) in non-revolving credit usage, which accounts for nearly two-thirds of the total. Loans by the federal government to students rose nearly one-third y/y, loans by credit unions increased 2.3% y/y and commercial bank loans rose 1.5% y/y. To the downside, lending by savings institutions fell 22.2% y/y and finance company lending slipped 0.7% y/y.

Consumers' revolving credit balances fell $3.4B (+1.3% y/y) during April and rose by just 0.1% (AR) during the last three months. Savings institutions lending rose 10.5% y/y, finance company lending rose 5.1% y/y, credit union lending rose 4.0% y/y and pools of securitized assets rose 2.1% y/y. Commercial bank lending slipped 0.1% 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.

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

Perspectives on Monetary Policy is yesterday's Speech by Fed Vice Chair Janet L. Yellen and it can be found here.

The Fed's latest Beige Book covering regional economic conditions is available here.

Consumer Credit Outstanding
(M/M Chg, SAAR)
Apr Mar Feb Y/Y 2011 2010 2009
Total $6.5B $12.4B $8.5B 4.8% 4.0% -1.1% -4.3%
  Revolving -3.4 3.7 0.0 1.3 0.9 -7.0 -8.7
  Non-revolving 10.0 8.7 8.4 6.6 5.7 2.5 -1.4
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