Two items of note in this month's consumer credit statement. First: after dipping the most in April ($3.5 billion) since April of last year, revolving consumer credit soared by $8 billion in May, the most since November 2007, and just shy of half of the $17.1 billion in total consumer credit increase, solidly beating expectations of an $8.5 billion increase. Whether this one time spike will hold is unknown. What is known is that the US government continued to fund student and car loans to the tune of $6.2 billion, or roughly in line with historical Federal Government funding. Which, however, brings us to the second note. In May something quite curious happened: as the second chart shows, while the Federal government continues to be the primary source of lending, the biggest source of loans in May was actually Depository Institutions, which added $17.5 billion in May, a number only matched by the surge in December lending amounting to $21.3 billion. Back then, however, all of this lending was to fund holiday purchases which would soon be returned (we all remember the epic surge in December retail sales, only for everything to be unwound and then some in January and February). Which then begs the question: just what did consumers splurge on in May? Because it better have been more than just gas.
Total monthly consumer credit: revolving and non-revolving.
Sources of consumer credit.