| Consumer Credit |
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Released On 1/9/2012 3:00:00 PM For Nov, 2011
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Prior | Consensus | Consensus Range | Actual |
| Consumer Credit - M/M change | $7.7 B | $7.6 B | $3.5 B to $11.6 B | $20.4 B |
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Highlights
Not since 10 years ago, since the aftermath of 9/11, have consumers taken on debt like they did in November. Consumer credit jumped $20.4 billion in the month led by non-revolving credit, up $14.8 billion, and including a very large gain for revolving credit, up $5.6 billion. The non-revolving gain largely reflects strength in car sales with the gain on the revolving side reflecting credit card use.
Confidence to take on debt points to confidence in the jobs market and is a significant plus for the outlook on consumer spending. This report is a positive signpost for the economic recovery itself, and the market is reacting to it with the Dow moving toward session highs.
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Market Consensus before announcement
Consumer credit outstanding grew $7.6 billion in October following a $6.9 billion increase in September. The increase once again was centered in nonrevolving credit, which reflected strength in vehicle sales. Nonrevolving credit gained $7.3 billion in October after a $6.5 billion rise the prior month. Looking ahead, unit new motor vehicle sales jumped 2.8 percent in November, suggesting a sizeable gain for nonrevolving credit for the month.
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Definition
The dollar value of consumer installment credit outstanding. Changes in consumer credit indicate the state of consumer finances and portend future spending patterns.
Why Investors Care
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![[Chart]](showimage.asp?imageid=21894)
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The debt-to-income ratio shows how indebted consumers are relative to income. A rising ratio indicates that consumers are taking on greater debt burdens with respect to income growth. In a growing economy, this may not be dangerous. However, indebtedness could quickly become a problem if income and employment conditions turn around. The yearly change in debt outstanding shows yearly trends in debt growth and tends to be less volatile than the monthly change.
Data Source: Haver Analytics
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