Fed Report Shows Strong Consumer Credit Growth


Consumer credit outstanding expanded by a seasonally adjusted annual rate of 8.5% over the month of August 2016, 2.6 percentage points faster than its growth rate in July, 5.9%. According to the report, released by the Federal Reserve Board, there is now $3.69 trillion in outstanding consumer credit.

Growth in revolving credit, which is largely composed of credit card debt, contributed to the expansion in total consumer credit. Revolving credit outstanding grew by 7.0% on a seasonally adjusted annual rate over the month of August, 3.6 percentage points slower than its pace in July. There is now $975 billion in revolving credit outstanding.

Due to the month-over-month acceleration in growth and its overall size, non-revolving credit had a larger impact on the growth in headline consumer credit. Non-revolving credit includes student loans and auto loans. Over the month of August, non-revolving credit grew by 9.0%, 2.3 percentage points faster than its rate of growth in July. There is now $2.71 trillion in non-revolving consumer credit outstanding.


Outstanding credit is composed of both a borrower, the person or entity required to pay back the debt and an asset holder, the person or entity entitled to receive the payments. A previous post described the distribution, both on the borrower side and the asset holder side, of 1-4 family and multifamily mortgage debt.

The Federal Reserve Board’s consumer credit data also fits as a subset into this framework. While previous analysis assessed the borrowers and asset holders of mortgage debt, the consumer credit release provides information on the distribution of asset holders of non-housing related debt held by a specific borrower, the consumer.

As illustrated by the figure above, total consumer credit outstanding is dispersed across various asset holders.  Depository institutions and the federal government account for the majority of all consumer credit outstanding. However, the dispersion of asset holders is characteristic of non-revolving credit where the federal government holds 38% of non-revolving credit while banks and finance companies account for 25% and 23% of non-revolving credit respectively. Revolving credit is largely held by depository institutions.

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