Financial Controls: USA Consumer Credit Rises (Charts) *Federal Government & Sallie Mae reason for increase*

Monday, November 7, 2011

USA Consumer Credit Rises (Charts) Federal Government & Sallie Mae reason for increase

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Federal Reserve Statistical Release: Consumer Credit

USA Consumer Credit (Preliminary, Not Seasonally Adjusted) Total consumer credit increased +0.52% and +$12.74 billion to $2.467 trillion in September 2011 from August 2011. This is a 20-month high. Total revolving credit decreased -0.22% and -$1.76 billion to $791.06 billion, a 2-month low. Total nonrevolving credit increased +0.87% and +$14.498 billion to $1.67 billion, an all-time high now that student loans are included. [Revolving Credit + NonRevolving Credit = Total Consumer Credit]

[Editor's Note] Effective with the September 2010 data, the law changed and the U.S. federal government is the primary lender to students. Previously, the U.S. federal government had been the guarantor of student loans and private lenders provided the credit. A significant increase in NonRevolving Credit can be attributed to increased student loans by the government.

USA Consumer Credit Holders (Not Seasonally Adjusted) The U.S. Federal Government & Sallie Mae, Securitized Pools, and Savings Institutions increased lending for September 2011 at +3.65%, +2.42%, and +0.13%, respectively. Lending decreased for the other credit holders: Credit Unions -0.69%, NonFinancial Business -0.46%, Finance Companies -0.35%, and Commercial Banks -0.08%.

Commentary In September 2011, excluding the U.S. Federal Government & Sallie Mae, total consumer credit decreased -0.08% and -$1.55 billion from the prior month August 2011 and decreased -1.77% and -$37.71 billion from the prior year September 2010. Public sector credit, the U.S. Federal Government and Sallie Mae, has been supporting a significant portion, and in some cases all, of the consumer credit increase via mostly student loans. Private sector credit remains at low levels and is not significantly increasing.