Consumer Credit

The Lehmann Letter ©

Earlier this month the Federal Reserve released April data for consumer credit:

http://www.federalreserve.gov/releases/g19/Current/

It shrank be $188.4 billion at a seasonally adjusted annual rate.

The following chart puts that in perspective.


Consumer Credit

(Click on chart to enlarge)

(Recessions shaded)

After years of solid growth averaging over $100 billion per month, consumer credit is now contracting.

The table below reports consumer credit at the end of the month. You can derive the monthly change by subtracting one month from the next and multiplying by 12.

Jan... 2008 ...2,526.0
Feb ... 2008 ... 2,536.9
Mar ... 2008 ...2,549.0
Apr ... 2008....2,555.8
May... 2008... 2,565.5
Jun ... 2008...2,574.1
Jul ... 2008...2,581.8
Aug... 2008... 2,575.8
Sep ... 2008... 2,582.8
Oct ... 2008...2,578.1
Nov ... 2008 ...2,568.8
Dec... 2008...2,562.3
Jan ... 2009... 2,567.1
Feb...2009...2,556.2
Mar... 2009... 2,539.7
Apr ... 2009 ... 2,524.0

You can also see that consumer credit grew until last summer and has been falling since. When people feel good, they borrow and spend. When they don’t, they don’t. The economy won’t rebound until this number grows again.

(The chart was taken from http://www.beyourowneconomist.com. [Click on Seminars and then Charts.] Go there for additional charts on the economy and a list of economic indicators.)

© 2009 Michael B. Lehmann