Three in a Row: Another Great Consumer-Credit Report

The Lehmann Letter (SM)

This letter drew attention to strong consumer-credit gains for November and December. This afternoon the Fed released another great report:

http://www.federalreserve.gov/releases/g19/current/default.htm

In January consumer credit grew by $213.6 billion at a seasonally-adjusted annual rate. Examine the chart and you can see just how strong this report is, especially
since it follows the $244.8 billion and $231.6 billion increases of the prior
months.

We like to see strong consumer-credit growth because rising borrowing is a sign of rising spending.

(Keep in mind that these numbers reflect changes in automobile loans and credit card balances. They do not include mortgage credit of any kind.)

Consumer Credit

(Click on chart to enlarge)


(Recessions shaded)

Returning to the chart you can see that consumer credit grew by about $100 billion a month in the boom years of 2003 - 2007. That perspective makes three months of $200 billion gains seem especially impressive.

Let's hope subsequent months are equally strong.

(To be fully informed visit http://www.beyourowneconomist.com/)

© 2012 Michael B. Lehmann