Consumer Credit Rose Again, But Not Where We Thought

You might not know it by the current economic data, but consumer credit keeps rising.  We figured that a late Easter would drive credit up at the end of the month and cause higher balances on credit cards going into summer with Memorial Day, and this now looks to be seven straight gains in monthly credit readings.

On a seasonal adjustment, credit rose 3%, according to the Federal Reserve.  It increased $6.25 billion to$2.43 trillion.  If you straight-line the data on “per person” based upon close to 310 million Americans that comes to more than $7,838.70 figure of personal credit per American.  That is per belly button rather than per worker.

While we were expecting a gain (and we expect one for May as well), Dow Jones was looking for a gain of about $5.5 billion after a $4.8 billion gain in March.

There was just one problem with our expectations even if the overall number was basically correct.  Credit card debt actually fell by about $943.5 million.  Car loans and personal loans and student loans, which are considered non-revolving credit, created the gain with a boost of more than $7 billion.  We expected a raise in both revolving credit and in non-revolving credit.

Sometimes the math comes out to the same result but by different calculations.

JON C. OGG