Consumer Credit Posted Another Solid Gain in April
Summary
- Strong revolving credit growth drove the overall gain in consumer credit.
- Nonrevolving credit remained soft, possibly reflecting higher interest rates.
Consumer credit grew by $23.0 billion (6.8% y/y) in April after increasing $22.8 billion in March, revised down from a $26.5 billion rise. The Action Economics Forecast Survey indicated an expectation of a $20.5 billion increase in April. Credit growth kept pace with the rise in income in April, as the ratio of consumer credit outstanding to disposable personal income was steady at 24.6%.
The April gain in consumer credit was centered in revolving credit, which posted another solid increase of $13.5 billion (13.1% y/y), after a $14.8 billion rise in March (revised down from a $17.6 billion gain). The April increase in revolving credit balances, which mainly reflect credit card usage, was in line with typical gains over the past year.
Nonrevolving credit balances, which reflect secured and unsecured credit for some big-ticket, interest-sensitive items such as autos, mobile homes, trailers, durable goods, and vacations, increased $9.5 billion (4.8% y/y) in April after increasing $8.0 billion in March (revised down from $8.9 billion). Despite the pickup in April, nonrevolving credit remains weak. In comparison, nonrevolving credit gains have averaged $8.2 billion this year vs. average gains in the $16 billion range for all of 2022. This slowdown bears watching as it may reflect drag from the recent rise in interest rates.
The Federal Reserve Board consumer credit 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 data from the Census and the 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.
Peter D'Antonio
AuthorMore in Author Profile »Peter started working for Haver Analytics in 2016. He worked for nearly 30 years as an Economist on Wall Street, most recently as the Head of US Economic Forecasting at Citigroup, where he advised the trading and sales businesses in the Capital Markets. He built an extensive Excel system, which he used to forecast all major high-frequency statistics and a longer-term macroeconomic outlook. Peter also advised key clients, including hedge funds, pension funds, asset managers, Fortune 500 corporations, governments, and central banks, on US economic developments and markets. He wrote over 1,000 articles for Citigroup publications. In recent years, Peter shifted his career focus to teaching. He teaches Economics and Business at the Molloy College School of Business in Rockville Centre, NY. He developed Molloy’s Economics Major and Minor and created many of the courses. Peter has written numerous peer-reviewed journal articles that focus on the accuracy and interpretation of economic data. He has also taught at the NYU Stern School of Business. Peter was awarded the New York Forecasters Club Forecast Prize for most accurate economic forecast in 2007, 2018, and 2020. Peter D’Antonio earned his BA in Economics from Princeton University and his MA and PhD from the University of Pennsylvania, where he specialized in Macroeconomics and Finance.
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