Consumer Credit Extends Slow-Growth Trend
Summary
- Revolving credit has smallest increase in two years.
- Nonrevolving credit slowest in last 3 months since January 2022.
Consumer credit outstanding grew $15.3 billion (7.6% y/y) in February, down from a $19.5 billion increase in January; the January increase is revised up noticeably from $14.8 billion reported a month ago. The Action Economics Forecast Survey indicated an expected increase of $18.0 billion in February.
The February slowdown in consumer credit growth came in revolving credit, which increased just $5.0 billion (15.1% y/y) after a larger $12.8 billion advance in January. The January gain was revised up from $11.2 billion reported before. The $5.0 billion February increase is the smallest monthly change in revolving credit since April 2021. Revolving credit is basically credit card debt and thus a kind of indicator of sustained consumer demand in general.
Nonrevolving credit rose $10.3 billion in February (5.3% y/y) after a $6.7 billion increase in January, which is revised up from $3.6 billion in the previous release. Nonrevolving credit includes loans for big-ticket items, such as motor vehicles, mobile homes, trailers, durable goods and vacation packages.
Notably, for both broad categories of consumer credit, the last three months have been marked by distinctive slowdowns.
The value of motor vehicle loans outstanding increased 7.9% y/y in the fourth quarter of 2022, up from 3.4% in 2020. The value of student loans outstanding rose 1.7% y/y, down from a high of 14.7% in 2008.
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 forecast figures are contained in the AS1REPNA database.
Carol Stone, CBE
AuthorMore in Author Profile »Carol Stone, CBE came to Haver Analytics in 2003 following more than 35 years as a financial market economist at major Wall Street financial institutions, most especially Merrill Lynch and Nomura Securities. She has broad experience in analysis and forecasting of flow-of-funds accounts, the federal budget and Federal Reserve operations. At Nomura Securites, among other duties, she developed various indicator forecasting tools and edited a daily global publication produced in London and New York for readers in Tokyo. At Haver Analytics, Carol is a member of the Research Department, aiding database managers with research and documentation efforts, as well as posting commentary on select economic reports. In addition, she conducts Ways-of-the-World, a blog on economic issues for an Episcopal-Church-affiliated website, The Geranium Farm. During her career, Carol served as an officer of the Money Marketeers and the Downtown Economists Club. She has a PhD from NYU's Stern School of Business. She lives in Brooklyn, New York, and has a weekend home on Long Island.
