U.S. Consumer Credit Picked Up in March
by:Sandy Batten
|in:Economy in Brief
Summary
- Largest increase in four months; largest increase in revolving credit since March 2022.
- Nonrevolving credit remained depressed with smallest increase in three months.
Consumer credit outstanding increased $26.5 billion (7.3% y/y) in March, up from a $15.0 billion gain in February (revised down slightly from $15.3 billion). The Action Economics Forecast Survey had expected an increase of $16.5 billion in March.
The March rebound came in revolving credit, which rose $17.6 billion (14.1% y/y) after an anemic $5.8 billion increase in February (revised up from $5.0 billion). This was the largest monthly gain in revolving credit since March 2022 and reversed the nascent trend of slowing exhibited over the past three months. Revolving credit is essentially credit card debt and thus is often seen as an indicator of the state of consumer demand.
Nonrevolving credit includes loans for big-ticket items, such as motor vehicles, mobile homes, trailers, durable goods and vacation packages. By contrast to revolving credit, nonrevolving credit increased just $8.9 billion (5.1% y/y) in March, its smallest increase in three months, down from a $9.2 billion gain in February (revised down from $10.3 billion previously) and a $9.7 billion increase in January.
Growth in the value of motor vehicle loans outstanding slowed to 7.2% y/y in the first quarter of 2023 from 7.9% y/y in the fourth quarter of 2022. Growth in the value of student loans outstanding rose 2.0% y/y in 2023 Q1, up from 1.7% in last year’s Q4 and 1.3% in Q3.
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.
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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