Americans signed more mortgages, but swiped their credit cards less often in April. The Federal Reserve reports that consumers increased their non-revolving debt (like
mortgages and auto loans), and paid down their revolving debt (like credit cards) in April. Credit on a whole was virtually flat, rising just 0.5% on an annualized basis. The result is not altogether surprising, but we might see a new trend for May.
First, it's important to note that March was revised significantly. Initially, we thought total credit grew by 1.0%. Instead, it fell by 2.7%. February was revised downward as well. Last month's first revision showed a 3.0% decline, but now we learn its drop was 3.8%.
March also saw sizeable revisions in credits' components. Revolving credit was thought to have declined 4.5%; in fact, it was down 5.3%. Last month, we thought non-revolving credit grew by 3.9%. Instead, it shrunk by 1.2%.
That might provide some caution in assuming the accuracy in today's reported increase in credit for April. It says that revolving credit declined by 12.0%. That marks the 19th straight month that revolving credit has shrunk. It has fallen by $138 billion since September 2008.
Meanwhile, it reports a big jump in non-revolving credit -- a 7.1% increase. If correct, it would be the largest pop since January.
This could be explained by the growth in mortgages due to more home sales, as Americans scurried to buy houses before the home buyer credit expired at month's end.