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U.S. consumer credit picks up in February

U.S. consumer credit picks up in February

4/7/2021 11:40:00 PM

U.S. consumer credit picks up in February

Consumer credit increased at a seasonally adjusted annual rate of 7.9% in February, after being flat in the prior month, the Federal Reserve said Wednesday.

Total consumer credit at a 7.9% an annual growth rate, after remaining flat in January.Economists has been expecting a much smaller increase, according to a survey of economists conducted by the Wall Street Journal.Revolving credit, like credit cards, jumped at a 10.1% rate, reversing last month’s 10.6% decline. That’s only the second month credit card balances had increased since the pandemic began.

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T.J. Connelly, head of research at Contingent Macro, said some of the increase was likely due to the severe cold weather in February. Consumers tend to use the credit cards more during emergencies, he said.Nonrevolving credit, typically auto and student loans, rose 7.3% in February after a 3.3% rise in the prior month. This category of credit is much less volatile. It only fell briefly at the start of the pandemic before returning to steady growth.

The data does not include mortgage loans, which is the largest category of household debt.Fed Governor Lael Brainard said easy financial conditions engineered by the central bank are clearly supporting the economy.“If you look at consumer credit – it was really strong there,” Brainard said in an interview with CNBC.

“We are seeing the kinds of financial conditions broadly that are very consistent with supporting the flow of credit to businesses and to households,” Brainard said. Read more: MarketWatch »

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