Global| Dec 10 2012U.S. Consumer Credit Usage Continues To Heat Up
by:Tom Moeller
|in:Economy in Brief
Summary
Consumers are using their borrowing ability to keep spending. Consumer credit outstanding jumped $14.2B during October following a revised $12.2B September increase, initially reported as $11.4B, according to Federal Reserve figures [...]
Consumers are using their borrowing ability to keep spending. Consumer credit outstanding jumped $14.2B during October following a revised $12.2B September increase, initially reported as $11.4B, according to Federal Reserve figures released late on Friday. The latest increase swelled the y/y gain to 6.0%, its strongest since early-2008. The Action Economics survey called for an October increase of $9.7B. Versus last year, credit outstanding grew at an accelerated 6.0% rate.
A marked difference between the recent surge in credit usage and the last is that strength has been more pronounced in non-revolving credit lines. During October, non-revolving credit rose $10.7B after double-digit gains in the prior two months. That raised the y/y increase to 8.4%, its strongest since late-2002. Non-revolving credit accounts for roughly two thirds of the credit total. In contrast, consumers seem less inclined to quickly pull out their credit cards. Revolving credit rose a lesser $3.4B in October and that just recovered the September decline. The y/y increase remained a moderate 1.0%.
The figures used in this report are break-adjusted and calculated by Haver Analytics. There is a break in the credit outstanding data from November 2010 to December 2010 due to the Fed's benchmarking process. Benchmark estimates are based on the Census of Finance Companies (CFC) and the Survey of Finance Companies (SFC) conducted in 2010 and 2011, respectively. 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, SA | Oct | Sep | Aug | Y/Y | 2011 | 2010 | 2009 |
|---|---|---|---|---|---|---|---|
| Total | $14.2B | $12.2B | $18.9B | 6.0% | 3.4% | -1.2% | -4.5% |
| Revolving | 3.4 | -2.2 | 5.0 | 1.0 | 0.1 | -7.4 | -8.8 |
| Non-revolving | 10.7 | 14.4 | 13.9 | 8.4 | 5.0 | 2.5 | -1.8 |
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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