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Economy in Brief

U.S. Consumer Credit Usage Strengthens
by Tom Moeller  November 7, 2017

Consumers didn't hesitate to borrow last month. Consumer credit outstanding grew $20.84 billion during September (5.6% y/y) following a $13.14 billion August increase, revised from $13.07 billion. It was the strongest increase since November 2016. A $17.0 billion gain had been expected in the Action Economics Forecast Survey. During the past ten years, there has been a 51% correlation between the y/y growth in consumer credit and y/y growth in personal consumption expenditures.

Nonrevolving credit usage strengthened by $14.44 billion (5.6% y/y), nearly double the August increase. Federal government borrowing (38% of the total) rose 9.6% y/y. Finance company balances (22% of the total) fell 2.7% y/y. Borrowing from depository institutions (25% of the total) improved 4.0% y/y and credit union loans (12% of the total) increased 12.7% y/y.

Revolving consumer credit balances rose $6.40 billion (5.6% y/y), the strongest increase since May. Balances at depository institutions (84% of the total) increased 5.2% y/y. Finance company holdings (6% of the total) improved 4.6% y/y, while borrowing from credit unions (5% of the total) advanced 8.3% y/y.

Student loan balances increased a steady 6.3% y/y. Motor vehicle loan balances gained 4.7% y/y following last year's 7.2% rise.

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.

The Perennial Problem of Predicting Potential from the Federal Reserve Bank of San Francisco can be found here.

Consumer Credit Outstanding (M/M Chg, SA) Sep Aug Jul Aug Y/Y 2016 2015 2014
Total $20.84 bil. $13.14 bil. $17.84 bil. 5.6% 6.7% 7.1% 7.2%
   Nonrevolving 14.44 7.61 16.03 5.6 6.7 7.7 8.4
   Revolving 6.40 5.52 1.83 5.6 6.6 5.4 4.0
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