Wednesday, May 30, 2012

USA Consumer Credit Increases, Fueled by the Government and Sallie Mae

Federal Reserve Board: Consumer Credit (Not Seasonally Adjusted)

USA Consumer Credit (Not Seasonally Adjusted) Total consumer credit slightly increased +0.17% and +$4.39 billion in March 2012 from the prior month and increased +5.01% and +$120.26 billion from the prior year March 2011.

However, this is not the story, exclude public sector credit, the U.S. Federal Government and Sallie Mae, and total consumer credit slightly decreased -0.12% from the prior month and slightly increased +0.74% from the prior year. The government has been supporting the total consumer credit increase via student loans, since September 2010. Private sector lending by commercial banks, finance companies, and credit unions has been decreasing, after  peaking in December 2011.

USA Consumer Credit Holders (Not Seasonally Adjusted) As can be seen from the chart below, any and all significant credit growth has been fueled by the U.S. Government and Sallie Mae. Commercial Banks (-0.15%), Finance Companies (-0.24%), Credit Unions (-0.34%), and NonFinancial Business (-0.27%) lending decreased from the prior month. U.S. Federal Government & Sallie Mae (+1.53%), Securitized Pools (+1.05%), and Savings Institutions (+0.09%) increased lending during the month.

USA Consumer Credit Components (Not Seasonally Adjusted) Below are the monthly charts for total consumer credit and the two components, revolving credit and nonrevolving credit. A significant portion of the increase in nonrevolving credit can be attributed to student loans by the government.

[Editor's Note] Effective with the September 2010 data, the law changed and the U.S. federal government became the primary lender to students. Previously, the U.S. federal government had been the guarantor of student loans and private lenders provided the credit.

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