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Analysis

US consumer credit growth – steady as she goes

by Gabriel Stein

Mon 10 Feb 2014

US consumer credit growth – steady as she goes Enlarge Chart loading Image

What the chart shows: The chart shows the growth of consumer credit from all sources on a 12-month and on a six-month annualised basis

Why the chart is important: The rebound in the growth of US consumer credit from negative rates in 2009 and 2010, to 6-6½% growth from mid-2012 onwards, was one of the key signs pointing to the continuing US recovery. However, monthly numbers can be quite volatile and a weaker number – such as the dip in November last year to a monthly rise of 12.4 billion dollars, the lowest number in seven months – easily gives rise to concern that the recovery is losing its traction. However, the chart shows two things: first, that the somewhat weaker November number was followed by a strong rise in consumer credit – up 18.8 billion dollars, the strongest monthly rise since February; and second and more importantly, that overall, the growth of consumer credit continues to tick along at its healthy, if unspectacular 6-6½% annual rate. This is good news for the US economic outlook in 2014.

Chart and comments provided by Oxford Economics www.oxfordeconomics.com