The numbers: Consumer borrowing stayed strong in March after a sharp in the prior month, according to Federal Reserve data released Friday.
Total consumer credit increased $25.8 billion to $4.2 trillion. That’s an annual growth rate of 7.4%, down only a fraction from the 7.5% gain in the prior month. The February gain was the largest percentage increase since December 2019.
There hasn’t been two back-to-back gains in consumer credit above 7% since 2017.
Economists has been expecting a $20 billion gain, according to the Wall Street Journal forecast.
What happened: Revolving credit, like credit cards, rose 7.9% in March after a 10.4% gain in the prior month.
Nonrevolving credit, typically auto and student loans, rose 7.2% after a 6.7% gain February. This category of credit is much less volatile. It only fell briefly at the start of the pandemic before returning to steady growth.
The Fed report does not include mortgage loans, which is the largest category of household debt.
Big picture: The Fed’s report on financial stability, released Thursday, said overall financial stresses on households have decreased since last fall. The share of auto loans that were either delinquent or in loss mitigation declined to 4.5% in February from 9% last June. Consumer credit card balances have contracted sharply due to depressed consumer spending, declines in card use and a drop in new card originations, the report said.
Market reaction: Stocks