February 2021 Consumer Credit Shows No Year-Over-Year Growth

Headline consumer credit expanded in January and was above expectations. Our analysis of the unadjusted data shows annual growth is non-existant year-over-year.

Analyst Opinion of the Consumer Credit Situation

Student loan year-over-year growth rate was little changed and remains in an overall slowing trend.

Not only does this data set suffer from backward revision (at times moderate to significant enough to change trends -, but the use of compounding (projecting monthly change as annual change) by the Federal Reserve to determine consumer credit growth rates exaggerates the volatility in this data.

  • that the amount of consumer credit outstanding relative to consumer expenditures is at 21st-century highs.
  • Household Debt Payments As A Percent of Disposable Income remains near all-time lows.

There is little evidence that loan defaults have increased due to the recession and pandemic.

Last month's headline said:

In January, consumer credit decreased at a seasonally adjusted annual rate of 0.4 percent. Revolving credit decreased at an annual rate of 12.2 percent, while nonrevolving credit increased at an annual rate of 3.2 percent.

This month's headlines said:

In February, consumer credit increased at a seasonally adjusted annual rate of 7.9 percent. Revolving credit increased at an annual rate of 10.1 percent, while nonrevolving credit increased at an annual rate of 7.3 percent.

Econintersect's view:

Unadjusted Consumer Credit Outstanding

  Month- over- Month Growth Year- over- Year Growth Month- over- Month Growth without Student Loans Year- over- Year Growth without Student Loans
Total +0.2 % 0.0 % +0.3 % -2.1 %
Revolving +0.0 % -11.7 % n/a n/a
Non- Revolving

+0.2 %

+3.9 % +0.3 % +3.6 %

Overall takeaways from this month's data:

  • Student loan year-over-year growth rate has been decelerating gradually since the beginning of 2013.
  • Student loans growth rate (US Government-owned) accelerated 0.0 % month-over-month and year-over-year growth is 4.4 % year-over-year
  • Revolving credit (e.g.credit cards - and this series includes no student loans) continues deep in contraction
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