Global| Jan 10 2011U.S. Consumer Credit Again Ratchets Up
by:Tom Moeller
|in:Economy in Brief
Summary
Consumers are borrowing but they're not using their credit cards. The Federal Reserve reported Friday that consumer credit outstanding rose $1.4B during November following a $7.0B October increase that was nearly double the initial [...]
Consumers are borrowing but they're not using their
credit cards. The Federal Reserve reported Friday
that consumer credit outstanding rose $1.4B during November following a $7.0B
October increase that was nearly double the initial indication. The gains follow
steady declines dating back to 2008. Through November, consumer credit, which
does not included mortgage debt, fell 1.9% on the heels of last year's record
4.4% drop.
The November increase was led by a $5.5B rise in non-revolving credit outstanding. Borrowing by the Federal government posted just a moderate increase but rose by nearly three quarters y/y. Other non-revolving credit (autos & other consumer durables), which accounts for roughly two-thirds of the total, was restrained. Finance company borrowing fell $4.1B (-5.0% y/y) while commercial bank borrowing again inched up m/m and was up 4.1% y/y. Credit union credit borrowing was essentially unchanged (-5.2% y/y) while nonfinancial business borrowing ticked up $0.8B (-2.6% y/y). Pools of securitized assets ticked down again m/m but were off by half from last year. (Each of these sector figures are not seasonally adjusted.)
Consumers still are in a hurry to shed revolving credit. Outstanding balances fell $4.2B during November and by 8.8% y/y which remained near the -10.6% record set in April. (Prior to 2009, revolving credit had never been negative y/y.) Pools of securitized assets fell 88.4% y/y but borrowing elsewhere rose. Commercial bank borrowing rose 68.1% y/y and savings institution borrowing rose 22.1%. Finance company borrowing lending rose by nearly one-half while credit union borrowing again rose 3.5%.
During the last ten years, there has been a 60% correlation between the y/y change in credit outstanding and the change in personal consumption expenditures. These figures are the major input to the Fed's quarterly Flow of Funds accounts for the household sector. Credit data are available in Haver's USECON database. The Flow of Funds data are in Haver's FFUNDS database.
What Have We Learned About Mortgage Default? from the Federal Reserve Bank of Philadelphia can be found here.
The Federal Reserve's Asset Purchase Program is today's speech by Fed Vice-Chair Janet L. Yellen and is available here.
| Consumer Credit Outstanding (m/m Chg, SAAR) |
Nov. | Oct. | Sept. | Y/Y | 2009 | 2008 | 2007 |
|---|---|---|---|---|---|---|---|
| Total | $1.4B | $7.0B | $0.0B | -2.2% | -4.4% | 1.5% | 5.7% |
| Revolving | -4.2 | -5.4 | -8.8 | -8.9 | -9.6 | 1.7 | 8.1 |
| Non-revolving | 5.5 | 12.5 | 8.8 | 1.5 | -1.3 | 1.5 | 4.4 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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