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Economy in Brief

Another Record Monthly Increase in U.S. Consumer Credit
by Sandy Batten  May 6, 2022

• Led by record increase in revolving credit balances.

• Rise in nonrevolving credit usage slowed slightly.

Consumer credit outstanding increased by a record $52.4 billion (7.3% y/y) in March on top of a $37.7 billion jump in February (revised down from $41.8 billion). A $25.0 billion March rise had been expected in the Action Economics Forecast Survey. The ratio of consumer credit outstanding to disposable personal income edged higher to 24.5% in March, the highest level since March 2020, from 24.4% in February.

Revolving consumer credit balances rose a record $31.4 billion (12.8% y/y) in March following a downwardly revised $14.2 billion increase in February (initially $18.0 billion). Revolving credit provided by depository institutions (90% of the total and mostly credit card debt) rose 14.9% y/y, up from 11.9% y/y in February. Borrowing from credit unions (6% of the total) rose 8.5% y/y in March versus 5.4% y/y in February. Nonfinancial business loans (2% of the total) were unchanged in March from a year ago. The value of finance company loans (1% of loans) declined 17.0% y/y in March.

The rise in nonrevolving credit slowed to $21.1 billion (5.7% y/y) in March from a record-setting $23.5 billion in February (revised down slightly from $23.8 billion). Federal government lending, which issued 42% of nonrevolving credit, was essentially unchanged m/m but was up 3.1% y/y versus 3.3% y/y in February. Nonrevolving loans by depository institutions (26% of credit) grew 10.5% y/y, up from 9.5% y/y in February. Finance company lending (16% of loans) slowed to 3.5% y/y in March from 5.5% y/y in February. Growth of credit union nonrevolving loans (14% of the total) picked up to 8.7% y/y, the quickest pace since January 2019, from 6.5% y/y in February.

During the first quarter of 2022, the growth of student loan balances slowed to 2.0% y/y from 2.6% in Q4 2021. By contrast, the pace of increase in motor vehicle loans picked up to 7.6% in Q1, the fastest growth since Q3 2015, from 7.4% in Q4 2021.

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.

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