The dollar value of consumer installment credit outstanding. Changes in consumer credit indicate the state of consumer finances and portend future spending patterns. Why Investors Care
| Released on 10/5/07 For Aug 2007 | ||||||||||||
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Highlights
Consumer credit rose $12.2 billion in August, extending a long string of increases. The gain was split between revolving credit and non-revolving credit, the latter reflecting the month's strong vehicle sales. Vehicle sales were a little less strong in September, pointing to lower gains for this category. But revolving credit is likely to remain high, boosted by what now appears to be a solid jobs market.
Consumer credit rose $7.4 billion in July, a big increase but down from a very swollen $12.0 billion in June. Revolving credit rose $5.0 billion in the month with a rise in non-revolving credit making up the balance. August data for consumer credit will be difficult to read due to the seizing of liquidity in a number of markets that month. But the month will be a baseline for whether credit markets are improving when September data come out.
Consumer credit Consensus Forecast for August 07: +$9.5 billion
Range: +$3.1 billion to +$10.0 billion
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The debt-to-income ratio shows how indebted consumers are relative to income. A rising ratio indicates that consumers are taking on greater debt burdens with respect to income growth. In a growing economy, this may not be dangerous. However, indebtedness could quickly become a problem if income and employment conditions turn around. The yearly change in debt outstanding shows yearly trends in debt growth and tends to be less volatile than the monthly change. |
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