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Economy in Brief

U.S. Consumer Credit Usage Cools
by Tom Moeller  February 7, 2018

Consumer credit outstanding increased $18.44 billion during December following a $31.03 billion November rise and a $22.99 billion October gain, revised from $27.96 billion and $20.53 billion. It was the weakest monthly increase since September. A $19.4 billion gain had been expected in the Action Economics Forecast Survey. During all of last year, consumer credit usage increased 5.4% y/y, the weakest full-year gain since 2011. During the past ten years, there has been a 52% correlation between the y/y gain in consumer credit and y/y growth in personal consumption expenditures.

Nonrevolving credit usage strengthened $13.35 billion (5.1% y/y) after surging during the prior two months. Federal government borrowing (38% of the total) rose 9.3% y/y. Finance company balances (22% of the total) fell 2.0% y/y. Borrowing from depository institutions (25% of the total) improved 3.1% y/y and credit union loans (12% of the total) strengthened 12.2% y/y.

Revolving consumer credit balances increased $5.11 billion (6.0% y/y), the weakest rise since August. Balances at depository institutions (84% of the total) increased 7.3% y/y. Finance company holdings (6% of the total) declined by roughly one half y/y, while borrowing from credit unions (5% of the total) advanced 9.2% y/y.

During Q4'17, student loan balances rose 5.9% y/y, down sharply from roughly 14% growth in 2008 and 2009. Motor vehicle loans increased 3.8% y/y, down from the 9.0% peak in 2014.

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.

A New Perspective on Low Interest Rates from the Federal Reserve Bank of New York is available here.

Consumer Credit Outstanding (M/M Chg, SA) Dec Nov Oct Dec Y/Y 2017 2016 2015
Total $18.44 Bil. $31.03 bil. $22.99 bil. 5.4% 5.4% 6.7% 7.1%
   Nonrevolving 13.35 19.99 14.75 5.1 5.1 6.7 7.7
   Revolving 5.11 11.04 8.24 6.0 6.0 6.6 5.4
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