U.S. consumer debt grew in February by the most in seven months with a rise in non-revolving loans, prior to the coronavirus pandemic.
Federal Reserve figures showed a $22.3 billion increase in total credit from the prior month. Non-revolving debt, which includes auto and school loans, rose by $18.1 billion — the most since 2015 — while revolving or credit-card debt was up $4.2 billion.
The pandemic has quickly spawned financial hardships for many in the US. Uncertain incomes means that consumers are likely to begin to cut back on purchases and borrow less.
Household credit has been expanding over the past few years at about the same pace as it was prior to the 2007-2009 recession.
Consumer debt, and not just wicked winter weather, is having a chilling effect on retail sales. Consumer debt rose by $241 billion in the fourth quarter of 2013, the largest period increase seen since the fall of 2007, according to a recent study by the Federal Reserve Bank of New York.
At the same time consumers were taking on more debt, retailers from Abercrombie and Fitch to Wal-Mart reported lackluster sales largely blamed on inclement weather and deflationary margins. Read more from this City Wire article from Kim Souza here.