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Economy in Brief

U.S. Consumer Credit Usage Continues To Heat Up
by Tom Moeller  December 10, 2012

Consumers are using their borrowing ability to keep spending. Consumer credit outstanding jumped $14.2B during October following a revised $12.2B September increase, initially reported as $11.4B, according to Federal Reserve figures released late on Friday. The latest increase swelled the y/y gain to 6.0%, its strongest since early-2008. The Action Economics survey called for an October increase of $9.7B. Versus last year, credit outstanding grew at an accelerated 6.0% rate.

A marked difference between the recent surge in credit usage and the last is that strength has been more pronounced in non-revolving credit lines. During October, non-revolving credit rose $10.7B after double-digit gains in the prior two months. That raised the y/y increase to 8.4%, its strongest since late-2002. Non-revolving credit accounts for roughly two thirds of the credit total. In contrast, consumers seem less inclined to quickly pull out their credit cards. Revolving credit rose a lesser $3.4B in October and that just recovered the September decline. The y/y increase remained a moderate 1.0%.

The figures used in this report are break-adjusted and calculated by Haver Analytics. There is a break in the credit outstanding data from November 2010 to December 2010 due to the Fed's benchmarking process. Benchmark estimates are based on the Census of Finance Companies (CFC) and the Survey of Finance Companies (SFC) conducted in 2010 and 2011, respectively. 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, SA Oct Sep Aug Y/Y 2011 2010 2009
Total $14.2B $12.2B $18.9B 6.0% 3.4% -1.2% -4.5%
   Revolving 3.4 -2.2 5.0 1.0 0.1 -7.4 -8.8
   Non-revolving 10.7 14.4 13.9 8.4 5.0 2.5 -1.8
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