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Economy in Brief


U.S. Consumers Pull Back Credit Usage
by Tom Moeller  August 7, 2014

The Federal Reserve Board reported that consumer credit outstanding increased $17.3 billion (6.7% y/y) during June following an unrevised $19.6 billion May rise. Expectations were for an $18.0 billion increase, according to the Action Economics Forecast Survey. During the last ten years, there has been a 54% correlation between the y/y growth in consumer credit and the y/y growth in personal consumption expenditures.

Usage of non-revolving credit increased $17.3 billion (8.4% y/y) in June. Federal government loans increased 16.5% y/y. These constitute roughly one-third of total non-revolving credit. Finance company lending (27% of the total) edged 0.5% higher y/y. Bank borrowing (26% of the total) rose 7.9% y/y) and borrowing at credit unions (10% of the total) advanced 13.1% y/y. Nonfinancial business loans (1% of the total) were unchanged y/y.

Revolving credit outstanding gained a lessened $0.9 billion (2.5% y/y) in June. Commercial bank & savings institution lending (81% of the total) gained 4.0% y/y. Finance company balances (8% of the total) declined 8.4% y/y while borrowing from credit unions (5% of the total) gained 7.9% y/y. Nonfinancial business accounts (3% of the total) remained unchanged y/y, and securitized credit card balances (4% of the total) fell 6.1% y/y.

These Federal Reserve Board figures 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 contained in the AS1REPNA database.

Evidence from the Bond Market on Banks' "Too-Big-To-Fail" Subsidy from the Federal Reserve Bank of New York is available here.

Consumer Credit Outstanding (M/M Chg, SA) Jun May Apr Y/Y 2013 2012 2011
Total $17.3 bil $19.6 bil. $24.9 bil. 6.7% 6.0% 6.1% 4.1%
   Revolving 0.9 1.7 8.8 2.5 1.3 0.6 0.2
   Nonrevolving 16.3 17.9 16.0 8.4 7.8 8.5 5.9
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