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Economy in Brief

U.S. Consumer Credit Continues to Decline
by Tom Moeller  July 8, 2020

• Reduced credit card usage leads the falloff.

Consumer's are pulling back as unemployment rises. Consumer credit outstanding fell $18.3 billion (+0.8% y/y) during May following a $70.2 billion April decline, revised from $-68.8 billion. An $18.0 billion decline had been expected by the Action Economics Forecast Survey. It was the third consecutive monthly shortfall.

Revolving consumer credit balances declined $24.3 billion (-7.6% y/y) in May, the fourth decline in five months. Credit provided by depository institutions, 90% of the total and mostly credit card debt, declined an accelerated 7.6% y/y. Credit union borrowing dropped 3.8% y/y and finance company loans fell 17.0% y/y.

Nonrevolving credit usage rose $6.0 billion (3.8% y/y) during May. It reversed half of the $12.0 billion April shortfall which had been the first decline since August 2011. Borrowing from the federal government, which issues over 40% of nonrevolving credit, grew 6.5% y/y. Depository institution loans (29% of credit) gained a lessened 4.2% y/y. Finance company borrowing (16.0% of loans) rose 0.6% y/y and credit union borrowing (14.0% of loans) eased 0.2% y/y.

These Federal Reserve Board figures are break-adjusted and calculated by Haver Analytics. The breaks in the series in 2005, 2010 and 2015 are the result of the incorporation of the Census and Survey of Finance Companies, as well as changes in the seasonal adjustment methodology.

The consumer credit data are available in Haver's USECON database. The Action Economics figures are contained in the AS1REPNA database.

COVID-19 and CO2 from the Federal Reserve Bank of San Francisco is available here.

Consumer Credit Outstanding (M/M Chg, SA) May Apr Mar May y/y 2019 2018 2017
Total ($ bil) -18.3 -70.2 -15.8 0.8% 4.6% 4.8% 5.3%
   Nonrevolving 6.0 -12.0 10.4 3.8 4.9 5.2 5.1
   Revolving -24.3 -58.2 -26.3 -7.6 3.8 3.6 6.0
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