U.S. Consumer Credit Growth Is Near Cycle Highs - credit card image

Consumer credit growth "rose at the slowest pace in more than five years in January," writes MarketWatch, "suggesting the economy’s growth engine may be running closer to empty than previously believed." 

Hang on a second...

That's true if you're staring at a less consequential (and volatile) measure of credit growth. The bigger picture shows consumer debt falling modestly off levels not seen since 2008. In other words, credit growth is near cycle highs!

So just to be crystal clear, and despite MarketWatch's dire warnings, consumer credit growth remains buoyant. Here's the breakdown via Hedgeye U.S. Macro analyst Christian Drake in today's Early Look:

  • Credit Growth:  The source of recent concern is the latest January data which showed Total Consumer Credit growth slowing to +2.8% month-over-month seasonally adjusted annual rate, representing the slowest pace of growth since August 2011.  This, however, only represents a -19 basis points acceleration to +6.29% on a year-over-year basis and a continued Trend acceleration off the most recent 3Q16 trough.  Similarly, revolving credit growth – which, arguably, is the better barometer of the state of domestic consumerism – has only decelerated for one month off the cycle peak.  

U.S. Consumer Credit Growth Is Near Cycle Highs - Revolving Credit CoD