Econ Wrap-Up: Consumer Credit
12/8/2014
Overall, consumer credit increased by $13.2 billion in October, but much to the disappointment of retailers, the gain was centered on non-revolving credit which increased by $12.3 billion on the typical mix between auto financing and student loans acquired by government from private lenders. Revolving credit, which includes credit cards, increased by only $900 million in the month, this was down from a $1.4-billion gain in September. Once again, the slow growth in revolving credit is a reflection of slow growth in hourly wages, which is preventing consumers from being willing to shop with cards. However, we note that overall credit usage has increased now for the last 11 months by roughly $10 billion. Typically, consumer credit goes through substantial revisions before the final number is released so any future revision is unlikely to alter the current growth trend. Nevertheless, consumer credit has increased by an average of $18.1 billion each month in 2014. Below is a chart of the total changes in consumer credit year-to-date.
Jennifer Coombs
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