Consumer Credit Rose in October

Total consumer credit outstanding rose $86.7 billion at an annual rate in October, a 2.1 percent increase from the prior month. From a year ago, total consumer credit is up just 0.3 percent (see chart), well below the 25-year annualized pace of 5.4 percent and the slowest pace since November 2010.

Revolving credit outstanding fell at a $65.6 billion annual rate in October (see chart), or 6.7 percent from the prior month. Total revolving credit outstanding was $979.6 billion or about 24 percent of total consumer credit.

The drop in revolving credit (primarily credit cards) was not enough to offset the $152.3 billion (see chart), or 4.8 percent, increase in nonrevolving credit. Total nonrevolving credit outstanding rose to $3,184.6 billion (about 76 percent of total consumer credit) from $3,171.9 billion in September.

As of the end of September, nonrevolving credit consisted mostly of student loans, totaling $1,704.9 billion, or 53.4 percent, and auto loans, totaling $1,219.0 billion, or 38.2 percent. Together, they account for 91.6 percent of nonrevolving debt outstanding.

Total consumer-credit growth was very slow in October by historical comparison and driven by a drop in revolving credit outstanding. Modest credit growth along with very low debt service measures and record high household net worth as of the second quarter are positive signs. Third-quarter data on household credit and net worth are due out on December 10.