Econintersect analysis is that total consumer credit growth decelerated 0.1% month-over-month, and the year-over-year growth is 5.9%. The seasonally adjusted consumer credit headlines are showing a growth of 5.25%. The underlying dynamics are very interesting this month as all the growth can be attributed to student loans – all while student loan growth continues to decelerate.
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In any event, consumer credit is not expanding at a rate which would suggest an accelerating economy. Â When student loans are backed out, the rate of expansion of consumer credit is:
- flat (neither accelerating or decelerating;
- consistent with the current growth of GDP.
The headline said:
In January, consumer credit increased at a seasonally adjusted annual rate of 5-1/4 percent. Revolving credit decreased at an annual rate of 1/4 percent, while nonrevolving credit increased at an annual rate of 7-1/2 percent.
Unadjusted Consumer Credit Outstanding
| Â | Month- over- Month Growth | Year- over- Year Growth | Month- over- Month Growth without Student Loans | Year- over- Year Growth without Student Loans |
| Total | -0.1% | +5.9% | +0.0% | +2.6% |
| Revolving | -0.3% | +0.9% | n/a | n/a |
| Non- Revolving | -0.1% | +7.8% | +1.1% | +6.8% |
Overall takeaways from this month’s data:
- Student loan growth has been decelerating for the past 11 months – even so, inflows into student loans accounted for all the growth this month;
- There was a jump in non-revolving credit growth rate (excluding student loans) this month;
- Non-revolving credit growth (generally this is all consumer credit except credit cards) has been decelerating for the past 4 months;
- The backward revision this month again was moderate – partially negating past reviews of consumer credit.
The market expected consumer credit to expand $8.0 to $15.3 billion (consensus = $14.0 billion) versus the seasonally adjusted headline expansion of $13.7 billion reported.
Note that this consumer credit data series does not include mortgages.
The Econintersect analysis is different than the Fed’s as follows:
- an effort is made to segregate student loans from consumer credit to see the underlying dynamics;
- this analysis expresses growth as year-over-year change, not one month’s change being projected as an annual change – which creates a lot of volatility.
- where our analysis expresses the change as month-over-month, month-over-month change is determined by subtracting the previous month’s year-over-year improvement from the current month’s year-over-year improvement.
