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Economy in Brief

U.S. Consumer Credit Usage Surprisingly Reverses Course in August
by Tom Moeller  October 7, 2020

• Nonrevolving borrowing edges higher.

• Credit card balances are being liquidated.

Consumers recently grew cautious about using credit. Consumer credit outstanding declined $7.2 billion during August following two months of double-digit gain. So far this year, consumer credit has declined 10.3%. A $14.1 billion increase had been expected by the Action Economics Forecast Survey.

Revolving consumer credit balances pulled back $9.4 billion (-9.6% y/y) in August, down for the seventh month this year. Credit provided by depository institutions, 90% of the total and mostly credit card debt, declined 9.7% y/y. Credit union borrowing fell 4.7% y/y and finance company loans were off 21.4% y/y.

Nonrevolving credit usage edged $2.2 billion higher (3.8% y/y) after double-digit increases in each of the prior three months. Federal government borrowing, which uses over 40% of nonrevolving credit, grew 5.6% y/y. Depository institution loans (29% of credit) gained a greatly lessened 3.1% y/y, down from 6.8% y/y growth as of December. Finance company borrowing (16.0% of loans) rose 2.3% y/y and credit union loans (14.0% of the total) increased 2.8% 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.

Recent Economic Developments and the Challenges Ahead from Federal Reserve Chair Jerome H. Powell is available here.

 Consumer Credit Outstanding (M/M Chg, SA) Aug Jul Jun Aug y/y 2019 2018 2017
Total ($ bil) -7.2 14.7 16.9 0.3% 4.6% 4.8% 5.3%
   Nonrevolving 2.2 14.9 18.6 3.8 4.9 5.2 5.1
   Revolving -9.4 -0.2 -1.7 -9.6 3.8 3.6 6.0
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