Consumer credit up in March


U.S. consumer debt growth eased in February and was less than forecast as Americans tapped credit cards, signaling consumption remained stable early this year.

Total credit climbed $15.2 billion from the prior month, missing the $17 billion median estimate of economists, following an upwardly revised $17.7 billion gain in January, Federal Reserve figures showed Friday. Revolving debt outstanding increased the most in three months while non-revolving credit growth slowed.

The data suggest consumers remained willing to spend in the first quarter, with activity propelled by a healthy labor market and steady wage gains. While weaker than expected, data still point to a confident consumer.

The University of Michigan’s March sentiment index advanced to the highest this year, though the Conference Board confidence measure was more muted. Credit expanded at a 4.5% annual rate after 5.3% in the prior month.

Revolving credit outstanding, which includes credit card debt, increased $2.95 billion after a $2.62 billion advance. Non-revolving debt outstanding climbed $12.2 billion after $15.1 billion. Such debt includes loans for school and automobiles. The gain is in-line with separate data showing sales of vehicles slowed in January and February.

Lending by the federal government, which is mainly for student loans, expanded by $5.6 billion before seasonal adjustment. The central bank’s consumer credit report doesn’t track debt secured by real estate, such as home equity lines of credit and home mortgages.

Bloomberg News

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