Consumer Credit Expanded (or at least did not contract) in April 2011

From the G.19 data release today (June 7) by the Federal Reserve:

Consumer credit increased at an annual rate of 3 percent in April 2011. Nonrevolving credit increased at an annual rate of 5-1/4 percent, while revolving credit decreased at an annual rate of 1-1/2 percent.

Econintersect has a “small quibble” with the percentages used in the headline, non-revolving grew at 3.4% YoY while revolving credit declined 4.9%.

The Fed uses seasonally adjusted numbers.  When you have a major event, say the mother of all recessions – seasonal adjustment methodology simply yields the wrong interpretation.  After a major event – it is better to use year-over-year change as the yardstick.

If student loans are ignored, consumer credit declined 6.2% YoY, but MoM consumer credit was unchanged -0.0%.

The Federal Reserve reports credit divided between revolving and non-revolving.  The majority of revolving credit is from credit cards, while non-revolving credit includes automobile loans, student loans, and all other loans not included in revolving credit, such as loans for mobile homes, education, boats, trailers, or vacations.

Related Articles

Scholarly Debt End Games  by Rick Davis

The Truth About the American Economy  by Robert Reich

U.S. Macroeconomic Overview  by MacroTides

Consumers Come to Terms with Frugality  by Rick Davis

Michigan Consumer Sentiment Rebound Continues in May  by Doug Short

CMI:  Consumer Expenditure Bottom Better Defined  by Rick Davis

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