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Consumer Credit Outstanding Annual Growth Rate Slows

money-fourConsumer credit outstanding, which totals about $3.401 trillion nationwide as of May 2015, rose at a slower seasonally adjusted annual rate in May than in April – 7.6 percent compared with 5.7 percent, according to a recent report from the Federal Reserve.

Non-revolving consumer credit outstanding grew at a seasonally adjusted annual rate of 7.0 percent during May (about $174 billion), which was about 0.8 percentage points faster than the rate at which it grew in April, according to National Association of Homebuilders Senior Economist Michael Neal on the NAHB's Eye on Housing blog. The increase in the rate of non-revolving consumer credit outstanding, which includes, auto loans, and student loans, was partially responsible for May's total consumer credit outstanding expansion, Neal said. Non-revolving consumer credit outstanding now totals $2.5 trillion.

The slower growth of total consumer credit outstanding in May was driven by slower growth in revolving consumer credit outstanding, which is largely comprised of credit card debt, according to Neal. Revolving consumer credit outstanding grew at a seasonally-adjusted annual rate of 2.1 percent in May ($19 billion), which was 9.4 percentage points lower than the growth rate recorded in April of 11.5 percent. Revolving consumer credit outstanding now totals $901 trillion.

"A previous post illustrated that the federal government is the largest holder of non-revolving credit outstanding," Neal said. "According to the Federal Reserve Board, non-revolving credit held by the federal government includes student loans, both originated and purchased. However, finance companies are also a large holder of non-revolving credit."

The vast majority of consumer credit held by financing companies is non-revolving, even though the amount of non-revolving and revolving credit outstanding comprise roughly equal portions when breaking down the holdings of depository institutions, according to Neal.

About Author: Brian Honea

Brian Honea's writing and editing career spans nearly two decades across many forms of media. He served as sports editor for two suburban newspaper chains in the DFW area and has freelanced for such publications as the Yahoo! Contributor Network, Dallas Home Improvement magazine, and the Dallas Morning News. He has written four non-fiction sports books, the latest of which, The Life of Coach Chuck Curtis, was published by the TCU Press in December 2014. A lifelong Texan, Brian received his master's degree from Amberton University in Garland.

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