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Economy in Brief

U.S. Consumer Borrowing Usage Eases
by Tom Moeller  July 8, 2015

Consumer credit outstanding increased $16.1 billion during May following a $21.4 billion rise during April, initially reported as $20.5 billion. It was the smallest increase in three months. Expectations were for an $18.5 billion increase, according to the Action Economics Forecast Survey. During the last ten years, there has been a 49% correlation between the y/y growth in consumer credit and the y/y growth in personal consumption expenditures.

Slower growth in revolving consumer credit usage accounted for the easing of total credit's increase. The gain of $1.58 billion (3.2% y/y) was the smallest since a decline during February. Commercial bank & savings institution balances (82% of the total) increased 4.6% y/y. Finance company lending (7% of the total) declined 9.1% y/y while borrowing from credit unions (5% of the total) gained 7.2% y/y. Nonfinancial business credit usage (3% of the total) improved 0.2% y/y and securitized credit card balances (4% of the total) fell 1.5% y/y.

Non-revolving credit borrowing picked up to $14.5 billion (7.8% y/y). Federal government loans increased 13.7% y/y. These constitute just over one-third of total non-revolving credit. Finance company balances (25% of the total) improved 2.4% y/y. Bank borrowing (25% of the total) rose 5.0% y/y and borrowing at credit unions (11% of the total) advanced 14.1% y/y. Nonprofit & educational institution loans (2% of the total) declined 11.5% y/y. Nonfinancial business loans (1% of the total) remained unchanged 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.

The minutes to the latest FOMC meeting can be found here.

Consumer Credit Outstanding (M/M Chg, SA) May Apr Mar Y/Y 2014 2013 2012
Total $16.1 bil. $21.4 bil. $21.1 bil. 6.5% 7.1% 6.0% 6.1%
   Revolving 1.58 8.5 4.9 3.2 3.7 1.5 0.6
   Nonrevolving 14.5 12.9 16.2 7.8 8.3 7.9 8.5
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