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Economy in Brief

U.S. Consumer Credit Growth Ramps Up
by Tom Moeller  July 10, 2012

Monthly growth in consumer credit picked up to its fastest this year during May. The Federal Reserve reported yesterday that credit grew $17.1B (AR, 5.3% y/y) after a $10.0B rise in April, revised from $6.5B. A $10.0B increase had been expected by Action Economics. The gain lifted the y/y rise to 5.3%, its fastest since June 2008.

Usage of revolving credit, improved the most. The $8.0B rise (1.5% y/y) compared to a $3.5B April decline. Savings institutions lending rose 8.7% y/y and commercial bank lending increased 1.9% y/y. Credit union lending gained 4.5% y/y while pools of securitized assets rose 1.1% y/y.

Non-revolving credit loans, which account for roughly two-thirds of total borrowing, pulled back in May to a $9.1B seasonally adjusted rate (7.3% y/y). Loans from the federal government grew 30.1% y/y, credit union borrowing rose 3.4% y/y and commercial bank lending rose 2.0%. Savings institutions borrowing fell 18.2% y/y while pools of securitized assets were off 5.4%.

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.

Consumer Credit Outstanding
(M/M Chg, SAAR)
May Apr Mar Y/Y 2011 2010 2009
Total $17.1B $10.0B $12.8B 5.3% 4.0% -1.1% -4.3%
  Revolving 8.0 -3.5 3.6 1.5 0.9 -7.0 -8.7
  Non-revolving 9.1 13.5 9.2 7.3 5.7 2.5 -1.4
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