THE TAKEAWAY: USD Consumer Credit (April) edged up to $11.058B from $8.369B revised prior-> Data misses estimates of $12.900B following disappointing unemployment data ->USD Flat
US Consumer Credit for the month of April came in at $11.058B, missing estimates of $12.900B but beating revised March data of $8.369B. Although Consumer Credit rose from the previous month, credit card debt growth declined from March as most of the improvement came from automotive loans and student debt.
Consumer Credit measures total financing for non-investment grade, durable goods over a one month period. These purchases may include automobiles and personal/retail loans. While the data presents an overview of purchases for more expensive goods, it is important to note that consumer credit does not include mortgages. If numbers come in higher than the previous month, it can be said that consumers are generally more confident about the direction of the economy moving forward.
The Dow Jones FXCM Dollar Index 5-Minute Chart
Source: MarketScope
The dollar index remained flat following the print, but all U.S. data helps paint a better picture in regards to the Fed’s date of tapering. The ‘taper’ is in reference to a scaling back of the Federal Reserve’s asset buying program, better known as quantitative easing. Any reduction in this ‘QE’ program would decrease risk-appetite thus sending the greenback higher and overpriced equities lower. Leaving out last month, April’s data is the worst since September of 2012 and the lack of accelerated growth in credit card debt shows American consumers are still wary of increased spending. Little improved data such as this point to a later tapering of the Fed’s massive QE program.
Written by Gregory Marks, DailyFX Research Team
