Consumer Credit Cools

April was a strong month for retail sales but it wasn't an especially strong one for consumer credit which rose $13.4 billion vs the prior month's outsized gain of $28.4 billion (revised). Revolving credit, which jumped $10.4 billion in the month before, rose $1.6 billion, which like the headline, is on the soft side of trend. Nonrevolving credit rose $11.8 billion reflecting the month's strength in vehicle sales as well as once again increases in student borrowing. Instead of borrowing, consumers dipped into their savings to fund their April spending spree as the savings rate, in data included in last week's personal income & outlays report, fell a very sharp 5 tenths to 5.4 percent. Data on May spending got underway last week with unit vehicle which held steady at April's respectable rate and point to another gain for the non-revolving credit. May's retail sales, which is on next week's calendar, may get more of a boost from revolving credit than from another drawdown from savings rate.

Recent History Of This Indicator:
Consumer credit is expected to rise $18.0 billion in April following a $29.7 billion surge in March. The revolving credit component, which has been weak this economic cycle, rose a very strong $11.1 billion in March to indicate less reluctance among consumers to run up their credit cards. Retail sales for April were very strong which points to another month of strength for this component.