Total consumer credit rose 1.1% on a year over year basis in September. The improvement was led by auto loans and a sharp 7.9% year over year increase in non-revolving credit. Revolving credit, however, fell at a steep -12.1% clip. This was the first net gain in over 8 months. Overall, the report is a mix of good and bad. The deterioration in credit card debt is alarming, however, there is clearly a bit of demand coming back in the form of auto loans. It will be important to see if auto sales continue at the current clip. If not, the consumer’s broad demand for credit will remain dead in the water.
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Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.
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