Consumer Credit Growth Diminishes in May
by:Tom Moeller
|in:Economy in Brief
Summary
- Nonrevolving credit balances decline.
- Revolving credit usage softens.
Consumer credit grew $7.2 billion (6.2% y/y) during May following a $20.3 billion April gain, revised down from a $23.0 billion rise. A $20.6 billion rise in May had been expected in the Action Economics Forecast Survey. The ratio of consumer credit outstanding to disposable personal income eased to 24.5% from 24.6% in April.
Nonrevolving credit balances, which reflect secured and unsecured credit for big-ticket items, such as autos, mobile homes, trailers, durable goods & vacations, fell $1.3 billion (+4.1% y/y) in May after increasing $6.2 billion in April, revised from $9.5 billion. Bank borrowing grew 3.1% y/y while finance company loans increased 2.2% y/y. Credit union loans rose 13.2% y/y while Federal government loans increased 2.5% y/y.
Revolving credit rose $8.5 billion (12.9% y/y) during May after increasing roughly $14.0 billion in each of the prior two months. Credit card balances grew 14.0% y/y but finance company loans fell 7.7% y/y. Credit union borrowing gained 14.8% y/y.
Student loan borrowing grew 1.6% y/y during Q1’23 while the value of motor vehicle loans increased 7.5% y/y.
The Federal Reserve Board consumer credit figures 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 AS1REPNA 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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