Friday, November 5, 2010

CONSUMER CREDIT RISES FOR FIRST TIME IN 8 MONTHS

Total consumer credit rose 1.1% on a year over year basis in September.  The improvement was led by auto loans and a sharp 7.9% year over year increase in non-revolving credit.  Revolving credit, however, fell at a steep -12.1% clip.  This was the first net gain in over 8 months. Overall, the report is a mix of good and bad.  The deterioration in credit card debt is alarming, however, there is clearly a bit of demand coming back in the form of auto loans.  It will be important to see if auto sales continue at the current clip.  If not, the consumer's broad demand for credit will remain dead in the water.

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