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Monday, December 7, 2015

Consumer Credit Rises Less Than Expected

Revolving credit barely made it into the plus column in October, up $0.2 billion for what is, however, an eighth straight gain. Non-revolving credit, which in contrast to revolving credit hasn't posted a decline since April 2010, rose an intrend $15.8 billion, once again boosted by vehicle financing and also by student loans which are tracked in this component. But the gain on the non-revolving side couldn't offset the flat result for revolving credit as total consumer credit rose a lower-than-expected $16.0 billion in October. The slowing in the revolving component may not be pointing entirely to consumer caution but may reflect a lack borrowing demand given the strength in the jobs market and the savings rate and also of course low gas prices which are leaving more money in consumer pockets. Still, the pause for revolving credit won't be lifting expectations for holiday spending.

Recent History Of This Indicator:
Consumer credit is expected to rise $20.0 billion in October following September's record $28.9 billion gain. The revolving credit component of this report, which had been dormant this cycle, has finally been showing steam and suggests that consumers are growing less reluctant to run up their credit cards. Nonrevolving credit has been strong the whole cycle, reflecting vehicle demand and also demand for student loans which are tracked in this report.

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