The recent recovery in consumer spending has been accompanied by a combination of strengthened use of non-revolving credit and less use of revolving usage. Reported Friday, overall consumer credit rose $6.0B during March following a little-revised February gain of $7.6B. A $5.0B increase has been expected by Action Economics. Credit has risen strongly during the last six months following declines from 2008 and into 2010.

Non-revolving credit, which accounts for nearly two-thirds of the total, rose for the eighth straight month. The $4.1B increase pulled the y/y change to 2.8% following a 1.5% increase last year. Loans by the Federal government rose 69.3% y/y but finance company lending fell 6.4%. Commercial bank credit fell 7.7% y/y while saving institutions credit was unchanged. Nonfinancial business credit fell 1.1% and pools of securitized assts fell 20.2%.

Consumers took a break from paying down their revolving credit outstanding balances for only the second month since September 2008. It rose $1.9B during March but was still down 5.2% y/y. Prior to 2009, revolving credit usage had never been negative y/y. Pools of securitized assets dropped 13.0% y/y and commercial bank credit fell 8.0%. Finance company credit rose 5.3% and savings institution credit rose by nearly one-quarter. Credit union credit rose 2.9% and nonfinancial business credit remained unchanged.

During the last ten years, there has been a 52% correlation between the y/y change in credit outstanding and the change in personal consumption expenditures, although the correlation recently has weakened considerably. These figures are the major input to the Fed's quarterly Flow of Funds accounts for the household sector.

The consumer credit data are available in Haver's USECON database. The Action Economics figures are in the AS1REPNA database.

Reaping the Full Benefits of Financial Openness is Friday's speech by Fed Vice Chair Janet L. Yellen and it can be found here.