Global| May 07 2021U.S. Consumer Credit Usage Remains Strong in March
by:Tom Moeller
|in:Economy in Brief
Summary
• Growth is driven by nonrevolving credit usage. • Revolving credit balances continue to rise as well. Consumers are confident enough to take on more debt. Consumer credit outstanding strengthened $25.8 billion during March after [...]
• Growth is driven by nonrevolving credit usage.
• Revolving credit balances continue to rise as well.
Consumers are confident enough to take on more debt. Consumer credit outstanding strengthened $25.8 billion during March after rising $26.1 billion in February, revised from $27.6 billion. The gain came after credit edged $1.6 billion higher in January, revised from a $0.1 billion. Earlier figures were revised. A $20.0 billion March rise had been expected in the Action Economics Forecast Survey. The ratio of consumer credit outstanding-to-disposable personal income fell to 19.4% compared to 23.9% during all of last year and 25.7% during 2019.
Nonrevolving credit usage increased $19.5 billion, the strongest rise since June of last year. It was increased from a $6.4 billion debt pay-down in April of 2020. Federal government borrowing, which issues over 40% of nonrevolving credit, grew an increased 4.5% y/y. Depository institution loans (25% of credit) grew 3.3% y/y, down from 6.8% y/y growth as of December 2019. Finance company borrowing (17.0% of loans) strengthened 8.0% y/y, up from 1.0% growth in 2019, and credit union loans (15.0% of the total) increased 1.9% y/y compared to double-digit growth in each year from 2014 to 2018.
Revolving consumer credit balances rose $6.4 billion after an $8.1 billion February rise, which was the largest increase since December 2019. Balances had been falling throughout 2020. Credit provided by depository institutions (90% of the total and mostly credit card debt), dropped 9.6% y/y. Credit union borrowing fell 10.3% y/y and the value of finance company loans weakened 10.9% y/y.
Through the first quarter of this year, student loan balances rose a greatly reduced 3.7% y/y while motor vehicle loans rose an increased 4.3% y/y.
These Federal Reserve Board figures are break-adjusted and calculated by Haver Analytics. The breaks in the series in 2005, 2010 and 2015 are the result of the incorporation of the Census and Survey of Finance Companies, as well as changes in the seasonal adjustment methodology.
The consumer credit data are available in Haver's USECON database. The Action Economics figures are contained in the AS1REPNA database.
| Consumer Credit Outstanding (M/M Chg, SA) | Mar | Feb | Jan | Mar y/y | 2020 | 2019 | 2018 |
|---|---|---|---|---|---|---|---|
| Total ($ bil) | 25.8 | 26.1 | 1.6 | 0.9% | -0.2% | 4.6% | 4.5% |
| Nonrevolving | 19.5 | 18.1 | 10.2 | 4.3 | 3.6 | 5.0 | 4.8 |
| Revolving | 6.4 | 8.1 | -8.6 | -9.0 | -11.1 | 3.6 | 3.7 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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