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Consumer Credit Rises At Slowest Pace Since 2013 (But Still Exponential), Revolving Credit Tumbles
Last month we observed that in the aftermath of the worst print in non-revolving (i.e., student and auto loans) debt since November 2013, that the subprime-credit driven, pardon the pun, feeding frenzy for cars is now over. And sure enough, following this month's disappointing auto sales which missed virtually for every single producer, we were again correct. This month, however, things are even worse, because while last month it was the collapse in the non-revolving debt that was the highlight, at least it was modestly offset by a surge in revolving credit as consumer loaded up the credit cards. No such luck this month.
Moments ago, we learned that consumer credit in January crashed from a revised $17.9 billion to only $11.6 billion, far below the 414.7 billion expected, the biggest miss since August, and the lowest growth in consumer credit since November 2013.
And while non-revolving debt did post a modest rebound from last month's plunge, rising from $11.7 billion to $12.7 billion, which was still the lowest since 2013 excluding January...
... it was the plunge in revolving, credit-card, debt that was the huge outlier this month, after revolving credit crashed from $6.2 billion in December to a negative $1.2 billion in January - this was the biggest drop in revolving credit since 2013!
In other words, US consumers are not only not spending (and as we noted are in fact boosting their savings), but have just slammed the breaks on charging their credit cards, which in turn explains the abysmal retail sales of the past two months, the worst streak since Lehman.
That all of this data roundly refutes the "unambiguously good" read of sliding (and now rising) gas prices as pertains to consumer spending, goes without saying.
Finally before you start cring for non-revolving credit, here it is shown on a long-term - and very exponential - chart.
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crisis is closer to us
Some people are hoarding cash in anticipation of World War III. Too bad Hawaii does not have FiOS, that is the place to be in case of troubles occurring in the US of A if Obummer declares "shelter in place" martial law.
Obama can shelter my balls on his chin, that about the only time Ill sit still.
LMAO!!!
why do you say that, junction?
I'm near Pearl Harbor as I type this, I would not do well if there is a nuke!
But I don't worry too much about central americans flooding across the border, if that's what you mean.
Or do you mean more along the lines of being on one of the other islands?
Makes some sense, consumers don't need credit, the government does...
How many blood donations will that be for an iWatch?
Consumers may be learning but the gov never will stop spending - until THE END
Well, if the consumers could borrow at .25% that might get them back into the game.
Maybe, some day, consumer credit will actually decline. Yeah, maybe.
Weren't people were paying their Owe Bum Wah care insurance premiums with CCs?
MOAR please
For shits and giggles, here is EconoDay's take on this report. Of course, it can be summed up in just one word: bullish.
http://mam.econoday.com/byshoweventfull.asp?fid=467372&cust=mam&year=201...
amerikans saving up to pay for their prison video calls (state pen doesn't take cc) ...
Only in the bizzaro world of ZH is good news bad news and bad news is bad news. Always. Who would complain that consumers are deleveraging? There is something wrong with you people.
I realize you want to counter the tbtf everything is good news mantra but you look just as stupid.
"Who would complain that consumers are deleveraging?"
Basically every economist or anyone that wants the markets to go up, spending to go up, etc? The US GDP is 70% consumption, and a lot of that is credit. So what in the fuck are you talking about?
Short term trend and long term trend, complex right?
The masses are tapped out. All this deleveraging talk is just macro economic speak. The savings rate is all about paying off of loans, defaulting on loans, or not buying stuff. The fact that Walmart and McDonalds are struggling says it all. EBT cards are not a functional replacement for jobs.
Watch it get exponential-er.
Yea thats what people dont get with exponential growth, one day the chart looks like this and the next day like that . . .
http://s18.postimg.org/43c87rxnd/Untitled.png
TIme to help this thing along and take advantage of the dip in PM. We were overdue on <1200. AU, an I was getting a little ansy with all that cash in visual range of my sweetie pie
Do you know what they call people who don't use logarithmic charts? Ok i'll spare the offensive epitephs. I came here for the bonus chart anyways.
FED theme song seems to be " Iam forever blowing blowing bubbles, pretty bubbles in the air " At the first hint interest rates may go up, the market tumbles almost 300 points---so much for fundamentals. The only question is when and where the next bubble bursts which will impact the market and therefore entire Ponzi. Think auto loans, college loans, fracking related leverage, re- emergence of mortgage and rental collateralization, Euro/Greek default triggering derivative bank credit freeze, Japan bond or yen collapse, currency trade war or yet another stupid war in Ukraine disrupting European/Russian trade, etc. The point is the Fed may not be able to remedy the next bubble especially if more than one occurs simultaneously or results in a series of bubbles bursting. Obviously policy makers are not taking any responsibility for our current situation and therefore are not in a position in managing our future direction. At this point the FED is powerless having exhausted their heavy monetary artillery while our politicos are still playing " King of the Mountain", campaign finance whoredom as well as fiscal spending irresponsibility. Tick, tick, tick, BOOM