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Revolving credit drops consumer credit in January
Total consumer credit fell for the 10th time in the past 12 months, declining 0.4 percent in January (seasonally-adjusted, annualized). Revolving credit – primarily credit cards – was the driving force behind the drop as it fell 12.1 percent during the month and is down 11.6 percent compared to a year ago.
Non-revolving credit – primarily auto and education loans – rose 3.2 percent in January and is up 3.8 percent over the year.
"The economic situation has notably improved since January, with better job numbers and a post-pandemic recovery in sight," said Curt Long, NAFCU's chief economist and vice president of research, in a new Macro Data Flash report. "The latest stimulus package will also be another economic boost, although many have been using stimulus payments to pay down debt, consumer spending after the pandemic will be strong and include revolving credit.
"NAFCU expects consumer credit to recover slightly in the spring followed by a more sustained recovery in the second half of 2021, particularly in the revolving credit sector," Long concluded.
While total consumer credit for credit unions declined 0.9 percent over the month, it's up 1.7 percent from a year ago. Banks also saw total consumer credit drop during the month (-1.8 percent) and is down 5.3 percent from January 2020, but financial companies' total consumer credit rose 1.1 percent in January and is up 4 percent from last year.
Over the past 12 months, credit unions' share of the market has risen 0.3 percentage points to 11.8 percent. Meanwhile, banks' share fell 2.2 percentage points to 39.7 percent, and financial companies' share has risen 0.6 percentage points to 13.4 percent.
For more up-to-date economic updates from NAFCU's award-winning research team, view NAFCU's Macro Data Flash reports.