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Economy in Brief

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

Consumer credit usage cooled down in June after a blistering start this spring. The Federal Reserve reported that credit grew $6.5B (AR) after a $16.7B rise in May, revised from $17.1B. A $10.5B increase had been expected by Action Economics. The gain left the y/y rise at 5.1%, nearly its quickest since June 2008.

Usage of revolving credit eased the most. The $3.7B decline (+0.7% y/y) compared to a $7.5B May spurt. Savings institutions lending rose 5.7% y/y and credit union lending gained 4.5% y/y. Pools of securitized assets rose 2.8% y/y. and commercial bank lending increased 0.9% y/y. Finance company credit fell 5.4% y/y.

Non-revolving credit loans, which account for roughly two-thirds of total borrowing, rose at a $10.2B rate (7.4% y/y). Loans from the federal government grew 29.9% y/y and pools of securitized assets gained 7.1% y/y. Credit union borrowing rose 3.1% y/y while commercial bank lending increased 1.6% y/y. Savings institutions borrowing fell 17.7% 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.

Financial Education is the title of today's speech by Federal Reserve Chairman Ben S. Bernanke and it is available here.

Consumer Credit Outstanding
(M/M Chg, SAAR)
Jun May Apr Y/Y 2011 2010 2009
Total $6.5B $16.7B $8.5B 5.1% 4.0% -1.1% -4.3%
  Revolving -3.7 7.5 -4.9 0.7 0.9 -7.0 -8.7
  Non-revolving 10.2 9.2 13.4 7.4 5.7 2.5 -1.4
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