Global| Apr 08 2011U.S. Consumer Credit Growth Strengthens
by:Tom Moeller
|in:Economy in Brief
Summary
During February, consumer credit expanded by $6.7B after a revised $4.5B increase during January, initially reported as $4.0B. Credit has risen strongly during the last five months following declines from 2008 through 2010. Non- [...]
During February, consumer credit expanded by $6.7B after a
revised $4.5B increase during January, initially reported as $4.0B.
Credit has risen strongly during the last five months following
declines from 2008 through 2010.
Non-revolving credit, which accounts for nearly two-thirds of the total, rose for the sixth straight month. The $10.3B monthly increase pulled the y/y change to 2.3% following a 1.5% increase last year. Loans by the Federal government rose 70.7% y/y but finance company lending fell 4.1%. Commercial bank credit fell 2.9% y/y and saving institutions credit fell 2.1%. Nonfinancial business credit fell 0.9%.
Consumers continued last month to pay down their revolving credit outstanding. It fell $2.7B during February and was down in most every month since September 2008. Prior to 2009, revolving credit had never been negative y/y. Pools of securitized assets led the decline with an 89.2% y/y drop. To the upside, commercial bank credit rose 80.5 y/y, finance company credit rose more-than one-half and savings institution credit rose one-third. Credit union credit rose 2.6% and nonfinancial business credit remained unchanged.
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.
| Consumer
Credit Outstanding (M/M Chg, SAAR) |
Feb | Jan | Dec | Y/Y | 2010 | 2009 | 2008 |
|---|---|---|---|---|---|---|---|
| Total | $7.6B | $4.5B | $4.7B | -0.6% | -1.7% | -4.4% | 1.5% |
| Revolving | -2.7 | -4.0 | 2.0 | -6.2 | -7.5 | -9.6 | 1.7 |
| Non-revolving | 10.3 | 8.3 | 2.7 | 2.3 | 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.
More Economy in Brief
