Consumers Hit The Brakes: Smallest Increase In Consumer Credit In 6 Years

In the latest red flag for the US economy, moments ago the Fed reported that consumer credit for the month of April rose a paltry $8.2 billion, barely half the consensus estimate of $15.5 billion, and 40% of march's $19.5 billion. This was the lowest monthly increase in consumer credit going back nearly 6 years to August 2011. The increasingly obvious downward trendline in crediting is hardly indicative of a confident consumer.

While revolving, i.e. credit card, debt rose a modest $1.5 billion, far below the increase in the prior two months...

... it was the sharp slowdown in non-revolving consumer credit, which rose just $6.7 billion, suggesting that either student or auto loans had virtually ground to a halt.

While the reason for the unexpected sharp slowdown is not immediately clear, a chart of sources of consumer credit reveeals that the US government, long a dominant source of consumer debt, has virtually disappeared.

Comments

hedgeless_horseman NoDebt Wed, 06/07/2017 - 15:35 Permalink

 This article is on consumer credit, not mortgages. Regarding buying a home, he advises to rent while saving up for the down payment plus an emergency fund, then get a fixed 15 year or shorter mortgage and work hard to pay it off early.I am not in agreement with all he preaches and sells, but his program does get people out of debt.

In reply to by NoDebt

CRM114 corporatewhore Wed, 06/07/2017 - 17:37 Permalink

Rural Canada. Cheaper homes (anything under $110k) needing work are selling in 24 hours, whereas they used to be on the market for 24 months. Houses costing $300k+ are being thrown up at record pace. Nothing in the middle is moving.So, the bubble is still expanding, but the basket below has fallen off.In this case it has relevance to consumer credit, since the poorer buyers are now mortgaged up to their eyeballs (I'm buying also, and have heard of several deals fall through because they couldn't get the mortgage, which never used to happen) AND are having to spend their spare cash on house reno work. AND the building materials prices are inflated because of all the rich homes going up.

In reply to by corporatewhore

Endgame Napoleon hedgeless_horseman Wed, 06/07/2017 - 15:41 Permalink

Interesting, when I had a custom luxury-item shop, some of the stay-at-home moms came in with envelopes. Even some who were married to very high-earning professionals saved up to buy something that was designed exactly to their taste once in awhile via this method. They said it just helped them keep track of these purchases. Back in the mid to late Nineties, in city galleries, the nouveau-riche, two high-earner couples swiped plastic with abandon, whereas the old money wealth paid with checks. My shop was in a more rural area, but still had some of the same clientele.

In reply to by hedgeless_horseman

Endgame Napoleon Angry White Guy Wed, 06/07/2017 - 15:45 Permalink

Well, when people have stable employment, they can save for luxuries, but that is not what people have been doing over these decades, mostly due to the FAKE employment opportunities. Temp, part-time and churn jobs at $10/hr, with staffs almost entirely composed of moms on welfare/taxfare or moms with spousal income or child support that covers rent and other basic bills, are NOT real jobs. They are akin to a teenage babysitter whose parents finance her major household bills.

In reply to by Angry White Guy

CRM114 Endgame Napoleon Wed, 06/07/2017 - 16:47 Permalink

I've just moved a long distance, and so am buying a ton of stuff. Judging by the prices, I'm the only one who is. Up here in the Great White North, the prices of stuff like quality workboots, dehumidifiers and garden carts are way down even on two years ago. The RSP is the same, but the discounts are huge. The kind of stuff you'd buy if you had a little more cash. Conclusion; almost nobody has a little more cash. The retail staff in the big boxes are on the side of the consumer - they'll tell you when all the good deals are without you asking. Some great stuff I would have bought today I will now buy on Friday, and get another 20% off.The stuff the poor have to or love to buy is still inflating. By way of contrast, in my local convenience store, 5oz of chips is $3.50, and 5oz of lovely ribeye steak is $5. This is crazy.The prices the rich pay are also inflating. Quality building materials and high end smartphones, top quality fashion.The middle class is dying quite rapidly, I think.

In reply to by Endgame Napoleon

NotBuyingIt Wed, 06/07/2017 - 15:38 Permalink

Hmmm...could this be an indicator of (or at least correlated with) the fact that the American people are waking up to what a bunch of scum sucking lowlifes these psycopaths are that run the banking industry. As for myself, getting gangstalked by BofA for 5 years did it for me! I'm staying as FAR away from credit as I can GET! I do not want these skeevy lowlifes in my life at all - ever again. No Fucktards, you do not need to know my SSN, my FEIN, my phone number or anything at all about me.Couldn't give one shit about my credit score. Car and house are paid off. When I need another car, I'll pay cash. I'm never giving these fucking scumbags another penny of usury. Fuck the HELL OFF, Bankster douchebags. Fuck the HELL OFF! (Wow, that feels good :-)

I am Jobe Wed, 06/07/2017 - 15:38 Permalink

When housing collapses wake me up, espcially in Austin, Round Rock, Dallas.  Houston is already getting there. Also don't forget to close schools , enough of the fucking bond measures. Children my azz. Parents can pay for their education STUDY BY MIT ECONOMIST: U.S. HAS REGRESSED TO A THIRD-WORLD NATION FOR MOST OF ITS CITIZENShttps://theintellectualist.co/study-mit-economist-u-s-regressed-third-w… Don;t forget it is for the Children and Pensioners

decentraliseds… Wed, 06/07/2017 - 16:00 Permalink

 Almost all the world’s economic and political problems revolve around the hegemony of a global corporate cartel, which is headquartered in the US because this is where their dominant military force resides. The US Constitution is therefore the “kingpin” of an all-inclusive global financial empire. These fictitious entities now own the USA and command its military infrastructure by virtue of the Federal Reserve Corporation, regulatory capture, MSM propaganda, and congressional lobbying. The Founders had to fight a bloody Revolutionary War to win our right to incorporate as a nation – the USA. But then, for whatever reason, our Founders granted the greediest businessmen among them unrestricted corporate charters with enough potential capital & power to compete with the individual states, smaller sovereign nations, and eventually to buy out the USA itself. The only way The People can regain our sovereignty as a constitutional republic now is to severely curtail the privileges of any corporation doing business here. To remain sovereign we have to stop granting corporate charters to just any “suit” that comes along without fulfilling a defined social value in return. The "Divine Right Of Kings” should not apply to fictitious entities just because they are “Too Big To Fail”. We can't afford to privatize our Treasury to transnational banks anymore. Government must be held responsible only to the electorate, not fictitious entities; and banks must be held responsible to the government if we are ever to restore sanity, much less prosperity, to the world. It was a loophole in our Constitution that allowed corporate charters to be so easily obtained that a swamp of corruption inevitably flooded our entire economic system. It is a swamp that can't be drained at this point because the Constitution doesn’t provide a drain. This 28th amendment is intended to install that drain so Congress can pull the plug ASAP. As a matter of political practicality we must rely on the Article 5 option to do this, for which the electorate will need overwhelming consensus beforehand. Seriously; an Article 5 Constitutional Convention is rapidly becoming our only sensible option. This is what I think it will take to save the world; and nobody gets hurt: 28th Amendment Corporations are not persons in any sense of the word and shall be granted only those rights and privileges that Congress deems necessary for the well-being of the People. Congress shall provide legislation defining the terms and conditions of corporate charters according to their purpose; which shall include, but are not limited to: 1, prohibitions against any corporation; a, owning another corporation, b, becoming economically indispensable or monopolistic, or c, otherwise distorting the general economy; 2, prohibitions against any form of interference in the affairs of; a, government, b, education, c, news media, or d, healthcare, and 3, provisions for; a, the auditing of standardized, current, and transparent account books, and b, the establishment of a state and municipal-owned banking system c, civil and criminal penalties to be suffered by corporate executives for violation of the terms of a corporate charter.    

moonmac Wed, 06/07/2017 - 16:43 Permalink

Sub Prime Auto Loan Lending came to a screeching halt after rising delinquencies were reported by Credit Agencies which also means there’s not a lot of gas being consumed while deadbeats hide their cars in garages from the Repo Man.

Mr. Augie Wed, 06/07/2017 - 16:48 Permalink

The (((Banksters))) have "worked" themselves into a tight corner with the slave-, debt- and war-driven economy. They need people to take out more loans to buy the cheap chinese junk to sustain growth they need to make more money. When we go deeper into debt it "creates" more money to loan out and when this money gets spent it allows workers to work and to be able to pay the interest on their loans. Biggest scam going.

ThrowAwayYourTV Wed, 06/07/2017 - 17:40 Permalink

Banks are not lending to individuals. I have a credit score of 830 and $1000 expendable cash floating around in my wallet every month and the bank has turned me down over and over with the same excuse. "Debt to income ratio." Ha! and yet I get credit cards with 15 and 20K on them.Thats ok, I will continue to use the credit card checks and pay them off over and over and over. Been working just fine for me.