| Consumer Credit |
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Released On 2/7/2012 3:00:00 PM For Dec, 2011
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Prior | Consensus | Consensus Range | Actual |
| Consumer Credit - M/M change | $20.4 B | $7.0 B | $-4.0 B to $15.0 B | $19.3 B |
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Highlights
The consumer is beginning to take on debt for the first time in the recovery. Credit outstanding rose $19.3 billion in December following November's breakthrough gain of $20.4 billion. Both months saw significant gains for revolving credit, up $2.8 billion in December following November's $5.6 billion surge. Up until now, consumers had been limiting their credit card usage. Non-revolving credit, up $16.6 billion in December, saw strong gains for most of last year in line with the pick up in auto sales. The rise in consumer credit, if extended to a long trend, would be a new and very big plus for the recovery.
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Market Consensus before announcement
Consumer credit outstanding in November jumped a huge $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.
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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=22036)
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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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