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Economy in Brief

U.S. Consumer Credit Growth Rebounds
by Tom Moeller  April 7, 2014

The Federal Reserve Board reported that consumer credit outstanding increased $16.5 billion during February following an unrevised $13.8 billion January rise. The increase outpaced expectations for a $14.0 billion rise, according to the Action Economics Forecast Survey. During the last ten years there has been a 54% correlation between the y/y growth in consumer credit and the y/y growth in personal consumption expenditures.

Usage of non-revolving credit increased $18.9 billion (7.7% y/y) in February. Federal government loans increased 16.9% y/y. These constitute roughly one-third of total non-revolving credit. Finance company lending (28% of the total) edged up 0.3% y/y and commercial bank consumer loans (24% of the total) gained 6.6% y/y. Borrowing at credit unions (10% of the total) advanced 8.1% y/y and borrowing from savings institutions (1.0% of the total) increased 12.0% y/y.

Reported in February, fourth quarter student loan balances rose 8.3% y/y, down from nearly 15.0% growth in 2008. Motor vehicle loans outstanding increased 8.5% y/y, a new high and up from the 7.5% rate of liquidation in 2009.

Revolving credit outstanding declined $2.4 billion (+0.5% y/y) in February. Commercial bank lending (73% of the total) gained 1.0% y/y while savings institution lending (8% of the total) jumped by 13.0% y/y. Finance company balances (8% of the total) declined 6.6% y/y while borrowing from credit unions (5% of the total) gained 6.8% y/y. Nonfinancial business accounts (3% of the total) continued to fall, down 19.5% y/y, and securitized credit card balances (4% of the total) fell 7.1% y/y.

These Federal Reserve Board figures 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 contained in the AS1REPNA database.

Consumer Credit Outstanding (M/M Chg, SA) Feb Jan Dec Y/Y 2013 2012 2011
Total $16.5 bil. $13.8 bil. $18.0 bil. 5.6% 6.0% 6.1% 4.1%
   Revolving -2.4 -0.2 4.9 0.5 1.3 0.4 0.2
   Non-revolving 18.9 14.0 13.0 7.7 7.9 8.6 5.9
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