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Economy in Brief

U.S. Consumer Credit Usage Softens to Four Year Low
by Tom Moeller  August 5, 2016

Consumer credit outstanding increased $12.3 billion during June following a $17.9 billion May gain, revised from $18.6 billion. The 4.1% m/m increase was the smallest since July 2012. A $15.0 billion increase had been expected in the Action Economics Forecast Survey. During the last ten years, there has been a 46% correlation between the y/y growth in consumer credit and y/y growth in personal consumption expenditures.

Nonrevolving credit borrowing grew $4.6 billion (5.9% y/y) after a little-revised $16.1 billion gain. It was the smallest dollar increase since December as trend growth has been softening. The 2.1% rise, however, was the smallest since a decline in August 2011. Federal government loans (36% of the total) increased 11.0% y/y. Finance company balances (24% of the total) eased 1.8% y/y. Borrowing at depository institutions (25% of the total) improved 5.7% y/y, and borrowing at credit unions (11% of the total) jumped 11.4% y/y. Nonprofit & educational institution loans (2% of the total) declined 10.2% y/y, and nonfinancial business loans (1% of the total) remained unchanged y/y.

Revolving consumer credit increased $7.7 billion after a $1.8 billion rise, revised from $2.4 billion. It was the largest increase in three months and left y/y growth strong at 5.4%. Balances at depository institutions (84% of the total) grew 8.2% y/y. Finance company holdings (6% of the total) fell 10.2% y/y, while borrowing from credit unions (5% of the total) advanced 7.8% y/y. Nonfinancial business credit (2% of the total) fell 11.7% y/y, and securitized credit card balances (3% of the total) declined 16.2% y/y.

Student loans during Q2 increased 6.6% y/y while motor vehicle loans rose 7.0% 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.

Consumer Credit Outstanding (M/M Chg, SA) Jun May Apr Y/Y 2015 2014 2013
Total $12.3 bil. $17.9 bil. $17.0 bil. 5.8% 6.6% 7.2% 6.0%
   Revolving 7.7 1.8 1.0 5.4 5.2 3.9 1.4
   Nonrevolving 4.6 16.1 15.9 5.9 7.1 8.4 7.9
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