Global| Aug 06 2010U.S. Consumer Credit Outstanding Is Off Again
by:Tom Moeller
|in:Economy in Brief
Summary
Consumers still are shying away from carrying credit balances. At least they're looking to lower the balances they have. Consumer credit outstanding fell $1.3B during June after a $5.3B May decline that was smaller than reported [...]
Consumers still are shying away from carrying credit balances. At least
they're looking to lower the balances they have. Consumer credit outstanding
fell $1.3B during June after a $5.3B May decline that was smaller than reported
initially. The latest was the fifth consecutive monthly decline and, coupled
with larger drops late last year, the 3.5% y/y decline remained near a record.
Again, leading the decline was a $4.5B drop in revolving credit outstanding. Consumers still seem to be just cutting up their credit cards. The 9.4% y/y decline in credit outstanding was near the record for a series that never went negative before last year. Pools of securitized assets remained down and were near a fifth of their peak while finance company lending again held roughly constant (+32.4% y/y). Commercial bank lending fell for the third straight month after a surge during March. Loans from credit unions were roughly stable (+4.2% y/y) as was lending by savings institutions (+16.5 y/y).
Usage of non-revolving credit (autos & other consumer durables), which accounts for nearly two-thirds of the total, rose for the second straight month. The $3.2B monthly increase was the fourth this year and lessened the y/y decline to 0.1% after a 1.3% drop last year. The monthly gain was led by a $5.5B increase in loans from the Federal Government, up by nearly two-thirds y/y. Finance company lending slipped $0.1B (-2.9% y/y) and credit union lending fell $1.0B (-3.9% y/y). Commercial bank lending slipped $0.1B (+6.5% y/y).
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. Moreover, 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) |
June | May | April | Y/Y | 2009 | 2008 | 2007 |
|---|---|---|---|---|---|---|---|
| Total | $-1.3B | $-5.3B | $-14.2B | -3.5% | -4.4% | 1.5% | 5.7% |
| Revolving | -4.5 | -7.1 | -8.4 | -9.4 | -9.6 | 1.6 | 8.1 |
| Non-revolving | 3.2 | 1.8 | -5.8 | -0.1 | -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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