Another Record Monthly Increase in U.S. Consumer Credit
by:Sandy Batten
|in:Economy in Brief
Summary
- Led by record increase in revolving credit balances.
- Rise in nonrevolving credit usage slowed slightly.
Consumer credit outstanding increased by a record $52.4 billion (7.3% y/y) in March on top of a $37.7 billion jump in February (revised down from $41.8 billion). A $25.0 billion March rise had been expected in the Action Economics Forecast Survey. The ratio of consumer credit outstanding to disposable personal income edged higher to 24.5% in March, the highest level since March 2020, from 24.4% in February.
Revolving consumer credit balances rose a record $31.4 billion (12.8% y/y) in March following a downwardly revised $14.2 billion increase in February (initially $18.0 billion). Revolving credit provided by depository institutions (90% of the total and mostly credit card debt) rose 14.9% y/y, up from 11.9% y/y in February. Borrowing from credit unions (6% of the total) rose 8.5% y/y in March versus 5.4% y/y in February. Nonfinancial business loans (2% of the total) were unchanged in March from a year ago. The value of finance company loans (1% of loans) declined 17.0% y/y in March.
The rise in nonrevolving credit slowed to $21.1 billion (5.7% y/y) in March from a record-setting $23.5 billion in February (revised down slightly from $23.8 billion). Federal government lending, which issued 42% of nonrevolving credit, was essentially unchanged m/m but was up 3.1% y/y versus 3.3% y/y in February. Nonrevolving loans by depository institutions (26% of credit) grew 10.5% y/y, up from 9.5% y/y in February. Finance company lending (16% of loans) slowed to 3.5% y/y in March from 5.5% y/y in February. Growth of credit union nonrevolving loans (14% of the total) picked up to 8.7% y/y, the quickest pace since January 2019, from 6.5% y/y in February.
During the first quarter of 2022, the growth of student loan balances slowed to 2.0% y/y from 2.6% in Q4 2021. By contrast, the pace of increase in motor vehicle loans picked up to 7.6% in Q1, the fastest growth since Q3 2015, from 7.4% in Q4 2021.
These Federal Reserve Board figures are break-adjusted and calculated by Haver Analytics. The breaks in the series in 2005, 2010 and 2015 are the result of the incorporation of the Census and Survey of Finance Companies, as well as changes in the seasonal adjustment methodology. The consumer credit data are available in Haver's USECON database. The Action Economics figures are contained in the AS1REPNA database.
Sandy Batten
AuthorMore in Author Profile »Sandy Batten has more than 30 years of experience analyzing industrial economies and financial markets and a wide range of experience across the financial services sector, government, and academia. Before joining Haver Analytics, Sandy was a Vice President and Senior Economist at Citibank; Senior Credit Market Analyst at CDC Investment Management, Managing Director at Bear Stearns, and Executive Director at JPMorgan. In 2008, Sandy was named the most accurate US forecaster by the National Association for Business Economics. He is a member of the New York Forecasters Club, NABE, and the American Economic Association. Prior to his time in the financial services sector, Sandy was a Research Officer at the Federal Reserve Bank of St. Louis, Senior Staff Economist on the President’s Council of Economic Advisors, Deputy Assistant Secretary for Economic Policy at the US Treasury, and Economist at the International Monetary Fund. Sandy has taught economics at St. Louis University, Denison University, and Muskingun College. He has published numerous peer-reviewed articles in a wide range of academic publications. He has a B.A. in economics from the University of Richmond and a M.A. and Ph.D. in economics from The Ohio State University.
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