Growth in Consumer Credit Accelerates

According to the Federal Reserve Board, growth in the amount of consumer credit outstanding, this includes outstanding credit extended to individuals for household, family, and other personal expenditures, excluding loans secured by real estate, accelerated in April. According to the release, the amount of consumer credit outstanding increased at a seasonally adjusted annual rate of 4.7% in April, 1.1 percentage points higher than the 3.6% growth in consumer credit that took place in March. At the end of April the total amount of consumer credit outstanding was $2.8 trillion.

The increase in the amount of consumer credit outstanding reflects an expansion in both the outstanding amounts of non-revolving credit and revolving credit. While growth in non-revolving credit accelerated from the previous month, the monthly increase in revolving credit reversed the decline that took place in March. The amount of non-revolving credit outstanding, which is mostly composed of student loans and auto loans, rose by 6.4% or $124.5 billion on a seasonally adjusted annual basis in April. In March, non-revolving credit rose by 5.7%. Meanwhile, revolving credit outstanding, which is largely composed of credit cards, rose by 1.0% or $8.2 billion on a seasonally adjusted annual basis to $849.8 billion. In March, the amount of revolving credit outstanding fell by 1.3%.

The April expansion in revolving credit largely reflects an increase in the amount of revolving credit holdings at depository institutions. In April, depository institutions accounted for 80.4% of total revolving credit holdings. As Chart 1 illustrates, revolving credit increased by $2.6 billion in April on a not seasonally adjusted basis. Depository institutions contributed $4.0 billion in revolving credit holdings and credit unions accounted for an additional $0.1 billion. However, these gains were partially offset by a decline in the holdings of revolving credit by finance companies and pools of securitized assets. The monthly increase in the holdings of revolving credit by depository institutions may indicate that lending activity is beginning to grow.

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