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Economy in Brief

U.S. Consumer Credit Surges in May
by Tom Moeller  July 8, 2021

• Nonrevolving credit usage strengthens.

• Revolving credit balances jump.

Consumer credit outstanding soared $35.3 billion during May (3.7% y/y) following a $20.0 billion April strengthening, revised from $18.6 billon. The March increase of $19.3 billion was revised up, also from $18.6 billion. An $18.0 billion May rise had been expected in the Action Economics Forecast Survey. The ratio of consumer credit outstanding-to-disposable personal income of 23.2% in May compared to 23.9% during all of last year and 25.6% during 2019.

Nonrevolving credit usage expanded a sizable $26.1 billion (5.6% y/y) after a $21.0 billion April rise, revised from $20.6 billion. Federal government borrowing, which issues over 40% of nonrevolving credit, grew a steady 4.3% y/y. Depository institution loans (25% of credit) grew a strengthened 6.3% y/y, up from 2.7% last year. Finance company borrowing (17.0% of loans) rose a 8.5% y/y, up from 3.6% in 2020 and 1.0% growth in 2019. Credit union loans (15.0% of the total) increased an accelerated 5.9% y/y.

Revolving consumer credit balances jumped $9.2 billion (-2.2% y/y) after a one billion dollar April decline, revised from -$2.0 billion. Balances had been falling throughout 2020. Credit provided by depository institutions (90% of the total and mostly credit card debt) dropped 2.2% y/y. Credit union borrowing eased 0.9% y/y and the value of finance company loans weakened 15.2% y/y.

The value of student loans outstanding rose a greatly lessened 3.2% y/y during Q1'21. The value of motor vehicle loans increased an accelerated 4.8% 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.

 Consumer Credit Outstanding (M/M Chg, SA) May Apr Mar May y/y 2020 2019 2018
Total ($ bil) 35.3 20.0 19.3 3.7% -0.3% 4.6% 4.5%
   Nonrevolving 26.1 21.0 17.9 5.6 3.6 5.0 4.8
   Revolving 9.2 -1.0 1.4 -2.2 -11.1 3.6 3.7
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