Econoday Report: Consumer Credit December 7, 2009

2009 Economic Calendar

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Consumer Credit

Released on 12/7/2009 3:00:00 PM For October, 2009

	Prior	Consensus	Consensus Range	Actual
Consumer Credit - M/M change	$-14.8 B	$-8.8 B	$-9.5 B to $-5.5 B	$-3.5 B

Highlights
The October consumer credit reports shows a slowing in contraction in what is the latest sign of economic improvement. Consumer credit fell $3.5 billion in October, the ninth contraction in a row but well below expectations. September was revised more than $6 billion higher to a decline of $8.7 billion. The annual rate of total contraction eased sharply to minus 1.7 percent in October. vs. minus 4.2 percent for September. Nonrevolving credit, mostly car loans, rose $3.5 billion in the month, offset by a $6.9 billion decline for revolving credit, mostly credit cards. Consumers and banks are still cutting back on credit cards but subsequent strength in car sales points to further increases for non-revolving loans.

Market Consensus Before Announcement
Consumer credit outstanding fell $14.8 billion in September to extend a long run of declines. Revolving credit, mostly credit cards, fell $9.9 billion with non-revolving, mostly car loans, down $4.9 billion. Consumer credit likely will continue to contract in October but a rebound in auto sales for the month probably will boost the non-revolving components and soften the overall decline.

Definition
The dollar value of consumer installment credit outstanding. Changes in consumer credit indicate the state of consumer finances and portend future spending patterns. Why Investors Care

The debt-to-income ratio shows how indebted consumers are relative to income. A rising ratio indicates that consumers are taking on greater debt burdens with respect to income growth. In a growing economy, this may not be dangerous. However, indebtedness could quickly become a problem if income and employment conditions turn around. The yearly change in debt outstanding shows yearly trends in debt growth and tends to be less volatile than the monthly change.

Data Source: Haver Analytics

2009 Release Schedule

Released On: 1/8 2/6 3/6 4/7 5/7 6/5 7/8 8/7 9/8 10/7 11/6 12/7

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