| Consumer Credit |
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Released On 10/5/2012 3:00:00 PM For Aug, 2012
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Prior | Prior Revised | Consensus | Consensus Range | Actual |
| Consumer Credit - M/M change | $-3.3 B | $-2.5 B | $7.8 B | $3.7 B to $11.0 B | $18.1 B |
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Highlights
Another big jump in student loans drove consumer credit higher in August, up $18.1 billion split between a $13.9 billion rise for non-revolving credit and a $4.2 billion rise for revolving credit. Non-revolving credit shows across the board gains reflecting that month's very strong vehicle sales but mostly a surge in the federal goverment component which is where Sallie Mae student loans are classified. Non-revolving credit aside, the gain for revolving credit is solid and confirms the rise underway in consumer confidence, in this case to fund purchases with credit cards.
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Market Consensus before announcement
Consumer credit outstanding rose $6.5 billion in June, following a $16.7 billion jump the month before. The latest gain was led by non-revolving credit, gaining $10.2 billion in June after a $9.2 billion rise in May. Non-revolving credit is mostly for motor vehicle purchases and student loans. The revolving credit component was not good in June, declining $3.7 billion but following a $7.5 billion boost in May. The June dip largely reflected soft retail sales 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=23316)
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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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