Consumer Credit: Cars, Cards and College

Bottom Line: Consumer credit increased by $29.7B, sharply above market expectations. The year-over-year rate of growth, though, rose only slightly to 6.6%. Revolving debt increased sharply this month and has risen moderately over the past year. Meanwhile, non-revolving debt rose moderately with about half of this increase being student loans. The consumer debt-to-disposable income ratio (ex-student loans) had declined from a peak of 23.4% in April 2004 to a trough of 17.7% in December 2012 as households deleveraged. The current reading is modestly higher at 19.0%. Consumer Credit ROSE by $29.7 billion in March, compared with market expectations for an increase of $16.0 billion. However, the prior month was revised slightly lower from $17.2 billion to $14.1 billion. Over the past year, consumer credit has increased by $223.4 billion or 6.6%. Revolving Credit, including credit cards, ROSE by $11.1 billion. Over the past year, revolving credit has increased by $55.7 billion or 6.2%. Revolving debt is now close to its August 2009 levels but still 2.2% below its July 2008 peak. Non-Revolving Credit, including auto and education loans, ROSE by $18.6 billion. Over the past year, non-revolving credit has increased by $167.7 billion or 6.8%. Of this amount, $98.9 billion, or 59.0%, appears to be due to increases in student loans held by the federal government. Non-revolving debt had been climbing fairly rapidly since mid-2010 but is now increasing moderately over the past year.