Non-revolving Credit Continues Growing, but Revolving Credit Declines

The total amount of consumer credit outstanding expanded for the 19th consecutive month, but growth in March occurred at a slower rate than in previous months. According to the Federal Reserve Board, consumer credit outstanding grew at a seasonally adjusted annual rate of 3.5% in March to $2.8 trillion. In February, consumer credit rose by 8.0% and by 5.5% in January. Over the first quarter of 2013, consumer credit rose by a seasonally adjusted annual rate of 5.7%. This rate of growth was slightly lower than then 6.5% growth rate measured in the fourth quarter of 2012, but higher than the 4.9% rate of growth observed in the third quarter of 2012.

Presentation1

The March increase in consumer credit outstanding reflected a 5.9% rise in non-revolving credit. Non-revolving consumer credit outstanding rose to seasonally adjusted $2.0 trillion. Non-revolving credit is largely composed of automobile loans and student loans, but also includes secured or unsecured loans for manufactured housing, boats trailers, and vacations. In February, non-revolving credit outstanding grew by 11.3% and in January it rose by 6.9%. Over the first quarter of 2013, non-revolving credit rose by a seasonally adjusted annual rate of 8.1%. The first quarter growth rate was slightly lower than then 9.3% growth observed in fourth quarter of 2012, but higher than 6.9% growth rate that occurred in the third quarter of 2012.

The expansion in non-revolving consumer credit that was recorded in March was partly offset by a decline in revolving credit. Revolving credit is largely composed of credit cards. In March, revolving credit declined by a seasonally adjusted annual rate of 2.4% to $0.8 trillion. This is the first monthly decline in revolving credit outstanding since December 2012. Following a month-over-month decline in December 2012, revolving credit grew by 2.3% in January and by 0.6% in February. Over the first quarter of 2013, revolving credit outstanding rose by a seasonally adjusted annual rate of 0.2%, below the 0.3% growth rate that recorded in the fourth quarter of 2012 and the 0.4% growth rate that took place in the third quarter of 2012.

Advertisements

2 Responses to Non-revolving Credit Continues Growing, but Revolving Credit Declines

  1. […] It is not clear what interrupted the improvement of confidence witnessed in 2012, although it is reasonable to believe that the political drama surrounding the fiscal cliff had some impact. Regardless of the cause, these measures are consistent with other data, such as consumer credit reporting from the Federal Reserve that indicates that, for example, revolving debt … […]

  2. […] It is not clear what interrupted the improvement of confidence witnessed in 2012, although it is reasonable to believe that the political drama surrounding the fiscal cliff had some impact. Regardless of the cause, these measures are consistent with other data, such as consumer credit reporting from the Federal Reserve that indicates that, for example, revolving debt … […]

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: