[See Federal Reserve data below]
American consumers scaled back their borrowing in October by the biggest dollar amount on record, the Federal Reserve said.
Led by a decline in auto loans, consumer credit outstanding in the U.S. fell by a seasonally adjusted $7.2 billion in October from the previous month to $2.157 trillion. The October drop follows a revised $4 billion rise in September, originally reported as a $59 million decline. In annual terms, consumer credit was down 4% in October after rising at a 2.2% annual rate in September.
The size of the October drop was unexpected. Wall Street economists had forecast an expansion of $5.2 billion for the month. Consumer-credit data tend to be highly volatile from month to month and are frequently revised.
The October consumer-credit drop was led by nonrevolving credit, such as loans for cars, motor homes and education. Economists had expected a decline in auto sales, and therefore in car loans.
Nonrevolving credit in October fell by $5.6 billion, also the biggest drop on record in dollar terms, after falling a revised $1.3 billion in September. The September decline was previously reported as $3.2 billion. Nonrevolving credit fell at a 4.9% annual rate in October after falling at a 1.1% annual rate in September.
Revolving credit, such as credit-card debt, fell by $1.6 billion in October, after rising by a revised $5.3 billion in September, first reported as a $3.1 billion rise. Revolving credit fell at a 2.4% annual rate in October after rising at an 8% rate in September.
For the third quarter of 2005, consumer credit grew at a 5.5% annual pace, up from the 4% pace in the second quarter.
p.A8
WASHINGTON - U.S. consumer credit unexpectedly slid by a record $7.20 billion in October, on a big drop in loans taken for cars and boats, a Federal Reserve report showed on Wednesday.
The central bank said total consumer debt outstanding fell 4 percent to a seasonally adjusted $2.157 trillion from a revised $2.164 trillion in September. The rate of decline was the steepest since December 1990, and the dollar drop was the largest fall on record, the Fed told reporters.
Wall Street analysts polled by Reuters had expected a rise of $5.0 billion in consumer credit in October.
The Fed said non-revolving credit — made up of closed-end loans for cars, boats, education expenses and holidays — fell $5.58 billion in October.
Revolving credit, which includes credit and charge cards, dipped $1.63 billion.
PHILADELPHIA, Dec. 7 /PRNewswire/ — Fifty-two percent of people with incomes of $15,000 or less saw their debt load increase last year while only 28% of people with incomes of $75,000 or more saw their debt grow. Across all incomes, thirty-nine percent of people in the Philadelphia region saw their debts increase last year according to Consumer Credit Counseling Service of Delaware Valley's (CCCSDV) first-ever 2005 Debt and Savings Index. The survey of 833 people in the eight-country Philadelphia region reports the most often cited reasons for the debt increases were energy costs (51%), healthcare costs (34%) and the purchase of an unplanned household item (33%). In addition, the survey found that forty-six percent of people saved less money last year than the previous year.
A total of 833 people were surveyed from November 3 - November 8, 2005 by Zoomerang Data Service. Respondents were pulled from eight different counties including Philadelphia County, four Pennsylvania suburban counties and three New Jersey counties. The survey consisted of 32 questions about people's debt and savings habits.
"As the region's leading educator on the impact of debt and the importance of savings, we commissioned this survey to find out if people's debts are growing and if they are able to save," said Patricia Hasson, CCCSDV president. "We see the 'perfect storm' on the horizon with rising heating bills, rising interest rates and rising minimum payments on credit cards."
The survey also asked people what steps they were taking to reduce their rising debt. Consolidating credit cards (23%) and refinancing a mortgage (13%) were cited most often as the steps taken to reduce debt.
"Consumers clearly are confused about the impact of credit card debt consolidation," said Ms. Hasson. "Consolidating balances only moves debt. It doesn't reduce it. This confusion further demonstrates the need for more consumer education by agencies like ours about the best steps to reducing debt and increasing savings. It also puts homes at risk for homeowners if the behavior doesn't change."
The survey also asked people about their savings rate. Forty-six percent of the respondents said that they saved less last year than in the past. In terms of long-term savings vehicles, an overwhelming number (73%) of the region's people have 401(k) plans.
Yet, when asked if their workplace offers educational programs on how to save, 52 percent said that they did not or didn't know.
"This raises a concern about whether people in the area have enough information to adequately save for retirement. The fact that fifty-nine percent said they would like to see their workplace offer financial or savings education programs shows the need," Ms. Hasson said.
Of particular interest were programs on smart investing (59%), saving for retirement (59%), reducing debt (48%) and how to save (55%).
About CCCSDV
Consumer Credit Counseling Service of Delaware Valley is the region's non- profit leader in credit and savings education. Established more than 39 years ago, CCCSDV provides knowledgeable, expert and caring advice to consumers looking for help in improving their credit situation and in increasing their savings.
source: http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/12-07-2005/0004229632&EDATE= 7dec2005
G.19 CONSUMER CREDIT For release at 3 p.m. (Eastern Time)
1 October 2005 December 7, 2005
Consumer credit decreased at an annual rate of 4 percent in October after increasing at a 5-1/2 percent pace in the third quarter.
Both revolving and nonrevolving credit declined in October.
CONSUMER CREDIT OUTSTANDING 1
Seasonally adjusted
---------------------------------------------------------------------------------------------------------------------------------------
2004 2005
_______________ _______________________________________________
2000 r 2001 r 2002 r 2003 r 2004 r Q3 r Q4 r Q1 r Q2 r Q3 r Aug r Sep r Oct p
---------------------------------------------------------------------------------------------------------------------------------------
Percent change at annual rate 2,3
Total 10.8 7.7 4.7 4.6 4.4 5.9 4.3 2.7 4.0 5.5 6.5 2.2 -4.0
Revolving 11.8 5.6 2.7 2.7 3.8 9.2 1.9 -0.3 4.6 5.7 7.0 8.0 -2.4
Nonrevolving 4 10.2 9.1 6.0 5.7 4.9 3.9 5.7 4.6 3.7 5.4 6.2 -1.1 -4.9
Amount: billions of dollars
Total 1704.5 1835.6 1921.9 2009.9 2099.1 2076.8 2099.1 2113.5 2134.8 2164.1 2160.0 2164.1 2156.9
Revolving 675.7 713.3 732.7 752.8 781.1 777.3 781.1 780.4 789.3 800.5 795.2 800.5 798.9
Nonrevolving 4 1028.9 1122.2 1189.2 1257.1 1318.1 1299.5 1318.1 1333.1 1345.5 1363.5 1364.8 1363.5 1358.0
---------------------------------------------------------------------------------------------------------------------------------------
TERMS OF CREDIT AT COMMERCIAL BANKS AND FINANCE COMPANIES 5
Percent except as noted: not seasonally adjusted
---------------------------------------------------------------------------------------------------------------------------------------
Institution, terms, and type of loan
---------------------------------------------------------------------------------------------------------------------------------------
Commercial banks
Interest rates
48-mo. new car 9.34 8.50 7.62 6.93 6.60 6.55 6.71 6.86 6.93 7.08 7.08 n.a. n.a.
24-mo. personal 13.90 13.22 12.54 11.95 11.89 12.02 11.84 12.01 12.03 12.22 12.22 n.a. n.a.
Credit card plan
All accounts 15.78 14.87 13.40 12.30 12.71 13.01 12.50 12.21 12.76 12.48 12.48 n.a. n.a.
Accounts assessed interest 14.92 14.46 13.11 12.73 13.21 13.60 13.92 14.13 14.81 14.75 14.75 n.a. n.a.
New car loans at auto finance companies
Interest rates 6.61 5.65 4.29 3.40 4.36 5.54 5.01 4.86 5.18 5.80 5.80 5.89 6.13
Maturity (months) 54.9 55.1 56.8 61.4 60.5 60.9 61.3 59.3 59.5 60.2 60.1 60.2 61.4
Loan-to-value ratio 92 91 94 95 89 85 84 86 88 88 88 88 90
Amount financed (dollars) 20,923 22,822 24,747 26,295 24,888 23,179 24,376 24,116 23,477 24,575 25,059 23,579 24,209
---------------------------------------------------------------------------------------------------------------------------------------
This release is issued around the fifth business day of each month. The exact date and time may be obtained by calling (202) 452 - 3206.
Footnotes appear on reverse.
1
CONSUMER CREDIT OUTSTANDING
(Billions of dollars)
Not seasonally adjusted
---------------------------------------------------------------------------------------------------------------------------------------------
2004 2005
_______________ _______________________________________________
2000 r 2001 r 2002 r 2003 r 2004 r Q3 r Q4 r Q1 r Q2 r Q3 r Aug r Sep r Oct p
---------------------------------------------------------------------------------------------------------------------------------------------
Total 1729.8 1862.0 1949.0 2037.5 2128.6 2078.0 2128.6 2103.7 2120.8 2165.4 2154.9 2165.4 2161.7
Major holders
Total 1729.8 1862.0 1949.0 2037.5 2128.6 2078.0 2128.6 2103.7 2120.8 2165.4 2154.9 2165.4 2161.7
Commercial banks 551.1 568.4 602.6 669.4 704.3 676.3 704.3 683.1 684.0 708.2 705.4 708.2 710.9
Finance companies 220.5 238.1 237.8 295.4 366.8 352.6 366.8 360.9 355.6 360.8 357.4 360.8 361.2
Credit unions 184.4 189.6 195.7 205.9 215.4 214.5 215.4 216.7 221.4 230.2 229.2 230.2 230.4
Federal government and Sallie Mae 104.0 119.5 129.6 114.7 98.4 99.2 98.4 100.6 98.6 103.9 98.2 103.9 104.0
Savings institutions 64.8 71.1 68.7 77.9 91.3 89.1 91.3 90.8 94.0 101.4 99.0 101.4 102.9
Nonfinancial business 83.7 75.6 77.5 63.3 64.8 59.1 64.8 61.0 61.2 63.1 63.3 63.1 60.1
Pools of securitized assets 6 521.3 599.7 637.1 611.0 587.6 587.2 587.6 590.5 606.0 597.8 602.4 597.8 592.2
Major types of credit 7
Revolving 694.9 733.8 753.9 774.9 805.0 771.8 805.0 773.5 785.5 794.9 792.7 794.9 793.5
Commercial banks 227.7 234.9 246.4 285.0 314.6 286.2 314.6 288.0 293.7 300.6 298.1 300.6 303.4
Finance companies 37.6 31.5 38.9 37.6 40.5 45.4 40.5 41.6 44.5 46.2 45.3 46.2 46.6
Credit unions 22.2 22.3 22.2 22.4 23.2 22.2 23.2 22.3 22.8 23.3 23.4 23.3 23.4
Federal government and Sallie Mae n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.
Savings institutions 16.6 17.9 16.3 23.8 27.9 25.5 27.9 27.2 28.2 29.9 29.3 29.9 30.2
Nonfinancial business 43.4 37.4 39.8 19.4 17.9 16.9 17.9 17.2 17.3 19.1 19.2 19.1 15.8
Pools of securitized assets 6 347.4 389.7 390.3 386.7 380.8 375.7 380.8 377.2 379.0 375.8 377.4 375.8 374.0
Nonrevolving 1034.8 1128.2 1195.0 1262.6 1323.6 1306.2 1323.6 1330.2 1335.3 1370.6 1362.1 1370.6 1368.2
Commercial banks 323.4 333.5 356.2 384.4 389.6 390.1 389.6 395.1 390.2 407.6 407.3 407.6 407.5
Finance companies 182.9 206.6 198.8 257.8 326.3 307.2 326.3 319.3 311.1 314.6 312.0 314.6 314.6
Credit unions 162.2 167.3 173.5 183.5 192.1 192.3 192.1 194.4 198.6 206.9 205.8 206.9 207.0
Federal government and Sallie Mae 104.0 119.5 129.6 114.7 98.4 99.2 98.4 100.6 98.6 103.9 98.2 103.9 104.0
Savings institutions 48.2 53.2 52.4 54.0 63.4 63.7 63.4 63.6 65.8 71.5 69.6 71.5 72.7
Nonfinancial business 40.2 38.2 37.7 44.0 46.9 42.2 46.9 43.8 44.0 44.0 44.1 44.0 44.2
Pools of securitized assets 6 173.9 209.9 246.8 224.3 206.9 211.5 206.9 213.3 227.1 222.0 225.0 222.0 218.2
1. Covers most short- and intermediate-term credit extended to individuals, excluding loans secured by real estate. 2. The series for consumer credit outstanding and its components may contain breaks that result from discontinuities in source data. Growth rates are adjusted to exclude the effect of such breaks. 3. Percent changes are at a simple annual rate and are calculated from unrounded data. 4. Includes automobile loans and all other loans not included in revolving credit, such as loans for mobile homes, education, boats, trailers, or vacations. These loans may be secured or unsecured. 5. Interest rates are annual percentage rates (APR) as specified by the Federal Reserve's Regulation Z. Interest rates for new-car loans and personal loans at commercial banks are simple unweighted averages of each bank's most common rate charged during the first calendar week of the middle month of each quarter. For credit card accounts, the rate for all accounts is the stated APR averaged across all credit card accounts at all reporting banks. The rate for accounts assessed interest is the annualized ratio of total finance charges at all reporting banks to the total average daily balances against which the finance charges were assessed (excludes accounts for which no finance charges were assessed). Finance company data are from the subsidiaries of the three major U.S. automobile manufacturers and are volume-weighted averages covering all loans of each type purchased during the month. 6. Outstanding balances of pools upon which securities have been issued; these balances are no longer carried on the balance sheets of the loan originators. 7. Includes estimates for holders that do not separately report consumer credit holding by type. r=revised. p=preliminary.
source: http://www.federalreserve.gov/releases/g19/Current/ 7dec2005
|
To
send us your comments, questions, and suggestions click
here |