Jun 10, 2013 Walt Wojciechowski
During February, consumer credit in the United States increased by $18.6 billion, making many investors believe American borrowing habits were becoming more advantageous for lenders. However, in March, consumer credit jumped by less than $8 billion, Federal Reserve data shows.
The Fed's latest consumer credit report marked a decrease in revolving credit, with the outstanding debt in this category falling more than $1.7 billion. It's the first time this year that credit cards and other forms of revolving credit declined in the United States.
Nonrevolving debts increased, however, by almost $9.7 billion, which was fairly robust growth for student loan and auto loan providers. Even so, short term lenders and other funding services were expected to have performed better in March. Experts that Bloomberg surveyed expected consumer credit to spike by $15.6 billion during the month.
The source noted that the higher payroll taxes that have been in place since the start of the year maybe affecting consumer spending and borrowing. However, high stock values and home prices may allow homeowners a chance to improve their financial standing, which could lead to increased borrowing, Bloomberg speculated.
The signs are mixed but the growth in outstanding credit still has many investors optimistic about consumer spending plans.