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Commentary

US credit impulse dropped in Q3, but was still suggesting healthy private demand

8 Dec 2011 by Jim Fickett.

Today the Federal Reserve released Flow of Funds data through Q3. The US credit impulse dropped somewhat from Q2 to Q3, but still remained at a high level, suggesting healthy growth in private demand.

To get some preview of Q4 results, we look at growth in bank credit through October:

It is hard to be sure of a trend, given the large amount of noise in the series, but it would appear that the upward trend in the graph might be over, with growth leveling off – i.e. the acceleration of credit, and hence the positive impulse, might be ending. This fits with the latest Federal Reserve lending survey, which was a little less positive than the previous one (08-mixed_results_in_october_lending_survey).

All told, it continues to look like a slow and rocky recovery for now.

(See US private sector credit impulse for methodology, sources, and links to past commentary]].)