U.S. Consumer Credit Rebounded More Than Forecasts In September

By Trang Nguyen,

THETAKEAWAY: U.S.Consumer Credit Rebounded More Than Forecast in September> Non-revolving CreditGained > U.S. DollarMixed

The Federal Reserve report today showed that consumer debt in the U.S rebounded in September at an annual rate of 3.6 percent after unexpectedly slumping 4.7 percent in August. The total of all consumer credit outstanding rose by $7.386 billion to $2452 billion in the month, topping consensus forecast of an increase of $5.150 billion from Bloomberg survey. Change in consumer debt for August from the previous month was revised downward to a decrease of $9.682 billion from a decline of $9.501 billion, the biggest drop since April 2010 after ten consecutive month growth. Projections of thirty-one economists were fairly divergent, ranging from gain of $1 billion to $30 billion.

U.S. Consumer Credit: January 2010 to Present

Prepared by Trang Nguyen

Consumer credit increased more than forecast in September, led by a surge in non-revolving credit. Non-revolving credit including student loans and loans for new car purchases and mobile homes edged up at annual rate of 5.8 percent to $1662.4 billion from $1654.4 in August. Automobile purchases regained to $13.04 bil! lion fro m $12.1 billion a month earlier. With less-than-forecast jobs added and unemployment rate at unacceptably high 9 percent, more laid-off Americans borrow to come back school while current students take more debt to extend time in school. In contrast, revolving credit in September fell at an annual rate of 1 percent to $789.6 billion from $790.2 billion in August. Despite holiday sales season is approaching, consumers are using credit cards less for the third month due to slow recovery in the economy.

AUD/USD 1-minute Chart: November 7 2011

Charts createdusing Strategy Trader– Prepared byTrang Nguyen

As can beseen from the 1-minute AUDUSD chart above, the currency pair hadtraded in a narrow range between 1.0360 and 1.0370 before U.S.consumer credit report issued. Market participant then showed mixedreactions following the release. The AUD/USDclimbs 15 pips from 1.0370 to 1.0385. The Relative Strength Indicator crossingabove the 70-level indicated that currency traders was massiveselling the dollar in favor of the high-yielding currency. However,AUD/USD rally was just short-lived. The currency pair fell back to1.0365-level after 45 minutes. At the time this report was written,the aussie traded at 1.03705 dollars.

--- Written by Trang Nguyen, DailyFX Research Team for DailyFX.com

To contact Trang, email tnguyen@dailyfx.com

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Original Article: http://www.dailyfx.com/forex/market_alert/2011/11/07/110711_Consumer_Credit_September.html