The Federal Reserve announced today that total consumer credit increased $5.1 billion in February, an annualized rate of 2.4%. Revolving credit (such as credit cards) increased $4.7 billion, or 5.9% (annualized) from January. Non-revolving credit (such as auto loans) increased $0.5 billion, or 0.4% (annualized).
Total consumer credit (non-mortgage) rose $6.9 billion in January, up an annualized 3.3% from December. Revolving credit rose $5.6 billion (7.0% annualized), while non-revolving credit rose $1.5 billion (1.1% annualized). Consumer credit release.
The new Quarterly Banking Profile has been released. Excerpt:
FDIC-insured commercial banks and savings institutions reported net income of $105.5 billion in 2007, a decline of $39.8 billion (27.4 percent) from the record $145.2 billion that the industry earned in 2006. Fourth-quarter earnings declined to $5.8 billion, a 16-year low. Insured institutions set aside a record $31.3 billion in loan-loss provisions in the fourth quarter, as troubled loans continued to rise. The noncurrent loan rate rose to 1.39 percent at year end, the highest level in more than five years.
View the QBP
Consumer credit grew at an annualized 2.1% rate in December, or $4.5 billion. Revolving credit rose $2.1 billion, or 2.7% (annualized), while non-revolving credit rose $2.4 billion, or 1.8% (annualized).
Total consumer credit rose $15.5 billion to $2.505 trillion outstanding in November, up 7.4% (annualized) from last month. Revolving credit increased by $8.8 billion, or 11.4%, while nonrevolving credit rose $6.7 billion, or 5.1%. View the consumer credit release here.
Revolving consumer credit was up 8.3% (annualized) in October, or $6.4 billion. However, non-revolving credit was down 1.2%, or $1.6 billion.
Total consumer credit was up $4.7 billion from September, an annualized increase of 2.3%.
Rising levels of troubled loans in all major loan categories, but most notably in residential mortgage portfolios, led to a steep jump in expenses for bad loans in the third quarter. These higher costs, combined with sharply lower trading revenue, caused industry earnings to fall 24.7 percent from a year ago to $28.7 billion — the lowest level for industry earnings since the fourth quarter of 2002. This is the first time since 2003 that quarterly earnings have been below $30 billion. The industry’s return on assets (ROA) for the quarter was 0.92 percent, the lowest ROA since the fourth quarter of 1992. Slightly fewer than half of all insured institutions (48.5 percent) had ROAs of 1 percent or higher. A year ago, 54.4 percent of institutions attained this benchmark. The year-over-year decline in industry net income was fairly widespread; almost half of all institutions (49 percent) reported lower quarterly earnings compared to the third quarter of 2006.
Read the full QBP here
Total consumer credit grew $3.7 billion in September, an annualized rate of only 1.8%, versus 7.5% in August.
Revolving credit was up $3.4 billion, or 4.4%, while non-revolving credit was up $0.3 billion, or 0.3%.
The FOMC cut its target for the fed funds rate by 25 basis points to 4.50% today. The discount rate was also cut 25 basis points to 5.00%. From the Fed release:
Economic growth was solid in the third quarter, and strains in financial markets have eased somewhat on balance. However, the pace of economic expansion will likely slow in the near term, partly reflecting the intensification of the housing correction. Today’s action, combined with the policy action taken in September, should help forestall some of the adverse effects on the broader economy that might otherwise arise from the disruptions in financial markets and promote moderate growth over time.
Readings on core inflation have improved modestly this year, but recent increases in energy and commodity prices, among other factors, may put renewed upward pressure on inflation. In this context, the Committee judges that some inflation risks remain, and it will continue to monitor inflation developments carefully.
The Committee judges that, after this action, the upside risks to inflation roughly balance the downside risks to growth. The Committee will continue to assess the effects of financial and other developments on economic prospects and will act as needed to foster price stability and sustainable economic growth.
Consumer credit rose $12.2 billion, or 5.9% (annualized) in August. Revolving credit rose 8.2% to $915.5 billion, while non-revolving credit rose 4.7% to $1.554 trillion.