Consumer Credit: Cars and College

Bottom Line: Consumer credit increased by a double-digit amount for the 34th consecutive month, but was below expectations as revolving debt declined for the 1st time since February 2015. The year-over-year rate of growth is now 6.5%. Meanwhile, non-revolving debt rose moderately with about most of this increase being student loans. The consumer debt-to-disposable income ratio (ex-student loans) had declined from a peak of 23.4% in April 2004 to a trough of 17.7% in December 2012 as households deleveraged. The current reading is modestly higher at 18.8%. Consumer Credit ROSE by $10.5 billion in January, compared with market expectations for an increase of $17.0 billion. Additionally, the prior month was revised slightly higher from $21.3 billion to $21.4 billion. Over the past year, consumer credit has increased by $215.6 billion or 6.5%. Revolving Credit , including credit cards, FELL by $1.1 billion. Over the past year, revolving credit has increased by $46.8 billion or 5.3%. Revolving debt is now close to its October 2009 levels but still 3.9% below its July 2008 peak. Non-Revolving Credit , including auto and education loans, ROSE by $11.6 billion. Over the past year, non-revolving credit has increased by $168.8 billion or 6.9%. Of this amount, $103.1 billion, or 61.1%, appears to be due to increases in student loans held by the federal government. Non-revolving debt had been climbing fairly rapidly since mid-2010 but is now increasing moderately over the past year.