Those expecting the US consumer to carry the global economy may have to think twice.
The Bloomberg Econoday consensus for month-over-month credit growth was $16.5 billion but the actual report for January credit came it at $10.5 billion.
The more important news is December consumer credit was revised lower from a reported $21.3 billion increase to a mere $6.4 billion increase.
From Econoday …
Highlights
Breaks in the consumer credit series, due to changes in source data or methodology, are not uncommon, leading to sudden swings such as in mid-2011. Such a break is responsible for a big revision to December, now at a revised increase of $6.4 billion from an initial $21.3 billion. The revision is centered in the non-revolving component, which tracks vehicle financing and student loans and is now at a very slight increase of $0.9 billion vs an initial gain of $15.4 billion. January’s increase in total outstanding consumer credit is an initial $10.5 billion vs Econoday’s consensus for $16.5 billion. Revolving credit, the component that tracks credit cards, fell $1.1 billion in January following December’s nearly unrevised $5.5 billion increase. Even with January’s dip, revolving credit has been showing strength and has been, in a positive for consumer spending, hinting at greater willingness, if not the necessity, of the consumer to take on credit-card debt.
Recent History
Consumer credit is expected to rise $16.5 billion in January following a $21.3 billion gain in December that included a second straight strong showing for revolving credit, one that hints at greater consumer willingness to take on credit-card debt. Nonrevolving credit, boosted by vehicle sales and also by student loans, is the stronger of the two components.
Consumer Credit
There’s yet another chart with weakness starting in the mid-2014 taimeframe.
Mike “Mish” Shedlock
