Global| Nov 07 2011U.S. Consumer Credit Extension Rebounds M/M And Trend Firms
by:Tom Moeller
|in:Economy in Brief
Summary
Consumers rediscovered an interest in using credit for purchases during September. The Federal Reserve reported that overall consumer credit expanded $7.4B following a little-revised $9.7B drop during August, initially reported as [...]
Consumers rediscovered an interest in using
credit for purchases during September. The Federal Reserve reported that
overall consumer credit expanded $7.4B following a little-revised $9.7B
drop during August, initially reported as -$9.5B. A $5.4B increase had
been expected by Action Economics. Credit has risen 2.4% during the last
twelve months following the 1.7% decline during 2010.
Non-revolving credit, which accounts for nearly two-thirds of the total, rose $8.0B and recovered all of its August drop. Moreover, the 4.7% y/y change builds on the 1.5% increase last year. Loans by the Federal government rose slightly less than one-half y/y but finance company lending fell 3.8% y/y. Commercial bank credit also fell 3.5% y/y and saving institutions lending ticked up 1.9% y/y. Nonfinancial business credit rose by 1.4% y/y while pools of securitized assts fell 16.4% y/y.
Consumers revolving credit balances slipped by $0.6B during September and that left the y/y decline at 2.0%. Prior to 2009, revolving credit usage had never been negative y/y. Pools of securitized assets dropped 14.0% y/y and commercial bank credit fell 3.3% y/y. Meanwhile, finance company credit rose 6.8% y/y while savings institution credit jumped 10.8% y/y. Credit union lending rose a stable and slower 2.8% y/y but nonfinancial business credit remained unchanged.
During the last ten years, there has been a 53% correlation between the y/y change in credit outstanding and the change in personal consumption expenditures, although the correlation recently has weakened considerably. The credit figures are the major input to the Fed's quarterly Flow of Funds accounts for the household sector.
The consumer credit data are available in Haver's USECON database. The Action Economics figures are in the AS1REPNA database.
The October 2011 Senior Loan Officer Opinion Survey on Bank Lending Practices from the Federal Reserve Board is available here.
| Consumer Credit Outstanding (M/M Chg, SAAR) |
Sep | Aug | Jul | Y/Y | 2010 | 2009 | 2008 |
|---|---|---|---|---|---|---|---|
| Total | $7.4B | $-9.7B | $11.8B | 2.4% | -1.7% | -4.4% | 1.5% |
| Revolving | -0.6 | -2.3 | -3.4 | -2.0 | -7.5 | -9.6 | 1.7 |
| Non-revolving | 8.0 | -7.4 | 15.2 | 4.7 | 1.5 | -1.3 | 1.5 |
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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