ÀÖÓ㣨Leyu£©ÌåÓý¹ÙÍø

April 7, 2025

Consumers took on less debt in the beginning of this year. Breaking down the numbers, consumer credit edged down 0.2% in February at a seasonally adjusted annual rate; one month earlier, the rate was revised lower to 2.1% from 4.4%. On a year-over-year basis, consumer credit outstanding fell by 1.0%. The three-month moving average change in credit outstanding remains below the 2010s average.

Revolving debt, made up primarily of credit cards, edged higher by 0.1% at an annual rate in February. Retail sales data were sluggish for the month, increasing by 0.2%. Falling consumer confidence led to a drop in discretionary spending before the large tariff announcements in March and April.

The end of the moratorium on student debt repayments is starting to feed into credit scores and credit demand. An by the Federal Reserve Bank of New York estimated that a larger share of student loans had become newly delinquent at the end of last year. That increases the risk of default and represents a hit to consumption among those saddled with student debt.

Nonrevolving debt, which includes car loans, student loans and personal loans, declined 0.3% in February at an annual rate after gaining 0.8% for January. Unit sales of vehicles to consumers increased due to replacement demand from the Los Angeles fires and some buying ahead of tariffs. Cars have become a luxury good; higher-income individuals were more likely to purchase new vehicles in cash ahead of the announced tariffs.

Note: The data on consumer credit is not adjusted for inflation. Real consumer credit outstanding ticked .22% lower. It has declined in six of the last seven months.

Ìý