Student and auto loans still driving consumer credit gains

In the just reported consumer credit data released by the Fed, revolving credit outstanding on a seasonally adjusted basis rose $3.4b m/o/m to $857.6b. That is the highest since May but looking at a longer term chart reflects more bouncing along the bottom.

While nominal GDP growth is at new highs, revolving credit outstanding remains 16.5% below the ’08 record highs. AMEX CEO said it best this week at a conference that the US consumer is “generally reluctant to borrow” and “not demonstrating a desire or willingness to increase that debt burden.” On the nonrevolving side of credit outstanding, debt is at an all time high and that’s been mostly driven of late by student loans outstanding. Student loans held at the Fed’l Govt have increased from $104b in 2008 to $516b in Oct ’12.

Also boosting the nonrevolving credit side of late has been the increase in auto loans which cheap credit from the Fed has helped to engineer at the same time the ABS market has come back to life in the search for yield.

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