Global| Feb 08 2012U.S. Consumer Credit Outstanding Surges, Again
by:Tom Moeller
|in:Economy in Brief
Summary
Recent increases in consumers' sense of well-being have encouraged them to make more liberal use of credit. Reported late yesterday, consumer credit outstanding jumped another $19.3B during December after an unrevised $20.4B November [...]
Recent increases in consumers' sense of well-being have encouraged them
to make more liberal use of credit. Reported late yesterday, consumer
credit outstanding jumped another $19.3B during December after an unrevised
$20.4B November gain. A $7.0B increase had been expected by Action
Economics. The last two increases together were the strongest since late
2001. It raised usage 3.7% during 2011 following declines of 1.7% during
2010 and 4.4% in 2009.
Non-revolving credit usage, which accounts for nearly two-thirds of the total, surged $16.5B in December, the most since 2001. For all of last year, credit outstanding rose 5.5% after a moderate increase of 1.5% during 2010. Loans by the federal government to students rose more than one-third y/y. Loans by commercial banks increased 2.2% y/y while savings institution lending rose 1.3% y/y. To the downside, pools of securitized assets fell 12.2% y/y. Finance company lending fell 4.1% y/y while credit union loans dropped 1.3% y/y.
Continuing to turn around, consumers' revolving credit balances gained $2.8B during December. Usage during all of last year was roughly unchanged following credit reduction during 2010 and 2009. Credit issuance by savings banks rose 9.9% y/y following a nearly one-third increase in 2010. Finance company lending rose 8.6% y/y while credit union lending increased 4.7%. Pools of securitized assets were off 7.3% y/y. Commercial bank lending fell 1.4% y/y while nonfinancial business credit remained unchanged.
During the last ten years, there has been a 52% 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.
What Your Credit Report Says About You from the Federal Reserve Bank of Philadelphia is available here.
| Consumer Credit Outstanding (M/M Chg, SAAR) |
Dec | Nov | Oct | Y/Y | 2011 | 2010 | 2009 |
|---|---|---|---|---|---|---|---|
| Total | $19.3B | $20.4B | $6.7B | 3.7% | 3.7% | -1.7% | -4.4% |
| Revolving | 2.8 | 5.5 | 0.7 | 0.1 | 0.1 | -7.5 | -9.6 |
| Non-revolving | 16.5 | 14.8 | 6.1 | 5.5 | 5.5 | 1.5 | -1.2 |
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
