| Consumer Credit |
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Released On 8/7/2012 3:00:00 PM For Jun, 2012
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Prior | Prior Revised | Consensus | Consensus Range | Actual |
| Consumer Credit - M/M change | $17.1 B | $16.7 B | $10.3 B | $5.5 B to $13.0 B | $6.5 B |
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Highlights
June was a weak month for retail sales and it proved to be a weak month for revolving credit which fell $3.7 billion against what still is a rising trend. The initial outlook for July is positive given last week's very strong run of chain-store sales where gains were likely fed by credit card usage. Total credit outstanding rose $6.5 billion in June due to another strong rise for non-revolving credit of $10.2 billion. The gain for non-revolving credit continues to be driven by students who are taking out loans aggressively. The tough jobs market probably points to continued demand for student loans in the months ahead.
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Market Consensus before announcement
Consumer credit outstanding jumped $17.1 billion in May for the largest increase since the $19.1 billion boost seen in November 2011. Gains for the latest month were seen in both revolving and nonrevolving credit. Nonrevolving credit, which is being driven higher by strong demand for student loans including in the latest month, rose $9.1 billion. Auto loans also played a supporting role. Revolving credit jumped a giant $8.0 billion which is by far the strongest gain of the recovery.
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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=22988)
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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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