Consumer Credit Rises Nearly 6% in February
The Federal Reserve on Thursday released its preliminary report on consumer credit for the month of February 2016. On a seasonally adjusted basis, consumer credit rose 5.75% in the month, up from 5.1% growth posted in January, and well below…
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The Federal Reserve on Thursday released its preliminary report on consumer credit for the month of February 2016. On a seasonally adjusted basis, consumer credit rose 5.75% in the month, up from 5.1% growth posted in January, and well below the December increase of 7.8%.
In dollar terms, consumer credit rose by $17.3 billion month over month. Analysts had been expecting an increase of $14 billion.
Total consumer debt rose to $3.57 trillion in February of which $940.6 billion is revolving (mostly credit card) debt and $2.63 trillion is non-revolving debt. Revolving debt rose by just $3 billion and non-revolving debt rose by $15 billion. Revolving credit comprises primarily credit card balances and non-revolving credit includes motor vehicle loans, student loans, among others, and may be secured or unsecured. Mortgage debt is not included in the report.
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The largest holder of consumer debt is the federal government which holds about $984.2 billion in debt, including certain types of student loans. Banks hold about $754.4 billion in revolving debt and around $646.8 billion in non-revolving debt. Finance companies and credit unions are also large holders of non-revolving debt, with February totals of about $618.6 billion and $299.2 billion, respectively.
Credit card issuers Mastercard, Visa, American Express, and Discover were already trading lower Thursday afternoon, but did get a small upward jolt following the report.
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Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.
He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.
