📊 Consumer Credit (G.19)

To: Institutional Clients

From: Global Economics Strategy Team

Date: March 2026

Subject: Consumer Credit (G.19) Analysis – February 2026 Update

1. Executive Summary

The latest G.19 data reveals a resilient but decelerating trend in US consumer borrowing. Total consumer credit rose to $5,116.8bn in February 2026, reflecting a steady upward trajectory over the past year. However, the growth is characterized by a notable divergence between credit types: nonrevolving credit continues to drive the bulk of the expansion, while revolving credit remains sluggish.

Overall, the data signals a consumer that is maintaining spending capacity through structured loans rather than relying on high-cost, open-ended credit. This suggests a cautious household balance sheet management strategy, reducing the risk of a credit-driven systemic shock but also indicating a lack of aggressive demand-side momentum.

2. Five Main Views

• Steady Aggregate Expansion: Total consumer credit grew by 3.19% year-on-year (YoY), rising from $4,958.5bn in February 2025 to $5,116.8bn in February 2026.
• Nonrevolving Dominance: Nonrevolving credit is the primary growth engine, expanding 3.69% YoY ($3,654.2bn to $3,789.2bn), suggesting continued demand for auto loans and student lending.
• Revolving Credit Stagnation: Revolving credit growth is significantly muted at 1.79% YoY ($1,304.3bn to $1,327.6bn), indicating that consumers are avoiding increasing their credit card balances in a high-rate environment.
• Modest Monthly Momentum: Total credit saw a marginal month-on-month (MoM) increase of 0.18% in February 2026, continuing a trend of low-volatility, incremental growth.
• Shift in Credit Mix: The ratio of revolving to total credit has declined slightly over the 13-month period, shifting from 26.3% in February 2025 to 26.0% in February 2026, signaling a preference for structured debt over flexible lines.

3. Macro Characterization

(i) Growth: The data suggests a "slow-and-steady" contribution to GDP from personal consumption expenditures. While the 3.19% YoY increase in total credit prevents a contraction in consumption, the lack of acceleration suggests that credit is not acting as a powerful catalyst for economic acceleration.

(ii) Labor Market: The consistent, uninterrupted monthly rise in both revolving and nonrevolving credit implies a baseline of confidence in employment stability. There is no evidence of a "credit crunch" or a sudden deleveraging event that typically accompanies a sharp spike in unemployment.

(iii) Inflation: From a demand-side perspective, the sluggish growth in revolving credit (+0.05% MoM in February) is a positive signal for inflation targets. The absence of a credit-fueled spending spree suggests that household demand is not overheating, which should alleviate concerns regarding second-round inflationary pressures.

4. Policy Outlook

Based on the G.19 data, the balance of risks has shifted slightly toward the downside for growth, while remaining neutral for inflation. The consumer is not "over-leveraging" in a way that would necessitate further restrictive policy to cool the economy. Conversely, the muted growth in revolving credit suggests that current restrictive rates are effectively curbing discretionary borrowing.

Forecast: We expect the Federal Reserve to maintain a hold pattern in the immediate term, with a high probability of a 25bps rate cut in the next 3-6 months