Consumer Credit Growth Is Modest in December
by:Tom Moeller
|in:Economy in Brief
Summary
- Nonrevolving credit usage increases slightly.
- Revolving credit loans edge higher after November strength.
Consumer credit increased $1.5 billion (2.4% y/y) during December after rising $23.5 billion in November, revised from $23.8 billion. Consumer credit grew 7.6% during 2022. An $18.0 billion gain had been expected in the Action Economics Forecast Survey. The ratio of consumer credit outstanding to disposable personal income of 24.3% compared to 24.4% in November. It has been declining since a 25.4% December 2022 high.
Nonrevolving credit balances, which reflect secured and unsecured credit for big-ticket items, such as autos, mobile homes, trailers, durable goods and vacations, rose $0.5 billion (0.4% y/y) in December following a $5.5 billion November gain. Nonrevolving credit increased 5.3% in 2022. Bank borrowing fell 3.2% y/y while finance company loans rose 7.9% y/y. Credit union loans increased 3.9% y/y while Federal government loans declined 1.8% y/y.
Revolving credit usage increased $1.0 billion (8.4% y/y) in December after rising $17.9 billion in November. Revolving credit grew 15.1% in 2022. Credit card balance growth continued strong, up 8.7% y/y. Revolving loans at finance companies fell 6.3% y/y while credit union borrowing jumped 10.5% y/y.
The value of student loans outstanding fell 2.1% y/y in Q4 while the value of motor vehicle loans increased 3.9% y/y.
The consumer credit figures from the Federal Reserve Board are break-adjusted and calculated by Haver Analytics. The breaks in the series in 2005, 2010 and 2015 are the result of the incorporation of data from the Census and the Survey of Finance Companies, as well as changes in the seasonal adjustment methodology. The consumer credit data are available in Haver’s USECON database. The Action Economics forecast figures are contained in the AS1REPA database.
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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