News & Events

Economic Advisor: June 14, 2017
June 14, 2017


Consumer credit saw weak growth, while layoffs were down, and wholesale inventories saw a sizable drop.

Consumer Credit

Consumer borrowing grew just 2.6 percent in April, to hit a total of $3.821 trillion for the month, according to last week’s report from the Federal Reserve. April’s $8.1 billion increase over March was well below the $15 billion gain that the market had expected. This was the smallest growth in consumer credit since August 2011.

Revolving debt, such as credit cards, grew 1.8 percent for the month to hit $1.01 trillion. Non-revolving debt, such as student and car loans, increased 2.9 percent to reach $2.810 trillion, marking its smallest monthly gain since August 2011, as well.

Consumer credit is a key indicator in that it shows not only how much consumers are borrowing, but how they are borrowing. Revolving debt is more tied toward credit card transactions, and thus consumer spending, which comprises roughly 70 percent of economic activity.

Initial Jobless Claims

First-time claims for unemployment benefits filed by the newly unemployed during the week ending June 3, dropped to 245,000, a decline of 10,000 from the previous week’s total of 255,000, the Employment and Training Administration reported last week. Initial jobless claims serve as a proxy statistic for layoffs, and the market had expected initial claims to fall to 240,000 for the week.

The four-week moving average — regarded as a more reliable measure of initial jobless claims — grew to 242,000, a gain of 2,250 claims over the prior week’s average of 239,750. This was the 118th week in which initial claims were below the 300,000-claim level, which economists consider is an indicator of a growing job market.

 Wholesale Inventories

 Wholesale inventories dropped to $591.0 billion at the end of April, which was down 0.5 percent from March, according to last week’s report from the Census Bureau. This was the biggest monthly drop in more than a year. Compared to last year, April’s inventories were 1.6 percent higher than April 2016.

While declining inventories typically indicate increased purchases from retailers, sales for wholesalers dipped 0.4 percent to $462.3 billion for April. That said, compared to last year, April’s sales were 7.3 percent higher than April 2016.

This put April’s inventories-to-sales ratio for wholesalers at 1.28. For comparison, the April 2016 ratio was 1.35.

 This week, we can expect:

  • Tuesday — Producer price index for May from the Bureau of Labor Statistics.
  • Wednesday — Consumer price index for May from the Bureau of Labor Statistics; retail sales for May and business inventories for April from the Census Bureau.
  • Thursday — Initial jobless claims for last week from the Employment and Training Administration; industrial production and capacity utilization for May from the Federal Reserve.
  • Friday — Housing starts and building permits for May from the Census Bureau. 

Posted in Economic Advisor
Search News & Events
News Categories
Monthly Archives
Get started now

Fill out an online application today. It's easy.

Checklist complete?

Get your documents in order and we'll handle the rest.

NADA Guides

Value your mobile, modular
or manufactured home.