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Economy in Brief

U.S. Consumer Credit Usage Accelerates in 2014
by Tom Moeller  February 6, 2015

The improvement in consumer confidence last year was accompanied by increased borrowing. For all of 2014, consumer credit outstanding rose 6.9%, the largest rise since 2001. For December alone, consumer credit outstanding gained $14.8 billion following a $13.5 billion November rise, initially reported as $14.1 billion. Expectations were for a $15.0 billion December increase, 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 rose an improved 8.2% last year. For December, however, the $9.0 billion rise was the weakest since February 2012. Federal government loans increased 15.4% y/y. These constitute roughly one-third of total non-revolving credit. Finance company lending (27% of the total) improved 1.7% y/y. Bank borrowing (26% of the total) rose 5.4% y/y and borrowing at credit unions (10% of the total) advanced 15.1% y/y. Nonprofit & educational institution loans (3% of the total) declined 10.0% y/y. Nonfinancial business loans (1% of the total) remained unchanged y/y.

Revolving consumer credit outstanding increased 3.5% last year, the strongest gain since 2007. During December, it jumped $5.8 billion. Commercial bank & savings institution lending (81% of the total) increased 5.3% y/y. Finance company balances (8% of the total) declined 10.1% y/y while borrowing from credit unions (5% of the total) gained 6.9% y/y. Nonfinancial business accounts (3% of the total) were off 5.4% y/y and securitized credit card balances (4% of the total) fell 5.2% y/y.

Student loans increased 8.1% last year, the same as they did in 2013, but that was down modestly from the double-digit gains during the prior two years. Motor vehicle loans rose 8.7% in 2014, the strongest increase since 2001.

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) Dec Nov Oct Y/Y 2014 2013 2012
Total $14.8 bil. $13.5 bil. $15.7 bil. 6.9% 6.9% 6.0% 6.1%
   Revolving 5.8 -0.9 1.5 3.5 3.5 1.3 0.6
   Nonrevolving 9.0 14.4 14.2 8.2 8.2 7.9 8.5
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