Global| Dec 07 2011U.S. Consumer Credit Outstanding Increases Again
by:Tom Moeller
|in:Economy in Brief
Summary
Consumers are using credit to enhance their buying power. The Federal Reserve reported that overall consumer credit expanded $7.7B in October following a revised $6.8B increase during September, initially reported as $7.4B. A $7.0B [...]
Consumers are using credit to enhance their buying power. The Federal Reserve reported that overall consumer credit expanded $7.7B in October following a revised $6.8B increase during September, initially reported as $7.4B. A $7.0B increase had been expected by Action Economics. Credit outstanding 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 $7.3B, up slightly versus during September. Loans by the Federal government rose by roughly one-third y/y and finance company lending gained 0.7% y/y. Loans by nonfinancial business increased 1.6% and loans by savings institutions rose 0.5% y/y. Pools of securitized assets fell 12.6% y/y, commercial bank credit decreased 3.7% y/y and credit union lending was off 1.9% y/y.
Consumers revolving credit balances gained a minimal $0.3B during October leaving the y/y decline at 1.1%. Prior to 2009, revolving credit usage had never been negative y/y. Pools of securitized assets dropped 12.3% y/y and commercial bank credit fell 2.6% y/y. Meanwhile, savings institution credit jumped 13.7% y/y while finance company credit rose 6.7% y/y. Credit union lending rose a slower 2.5% y/y while 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.
| Consumer Credit
Outstanding (M/M Chg, SAAR) |
Oct | Sep | Aug | Y/Y | 2010 | 2009 | 2008 |
|---|---|---|---|---|---|---|---|
| Total | $7.7B | $6.8B | $-10.5B | 2.4% | -1.7% | -4.4% | 1.5% |
| Revolving | 0.3 | 0.4 | -1.6 | -1.1 | -7.5 | -9.6 | 1.7 |
| Non-revolving | 7.3 | 6.5 | -8.9 | 4.2 | 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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