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.

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