Americans took on far more debt in February as runaway inflation kept the pressure on, the Federal Reserve’s consumer credit report showed Thursday.
Debt levels jumped nearly $42 billion to a total of nearly $4.5 trillion. This is an annual increase of 11.3%, seasonally adjusted, far exceeding economists’ expectations and setting a new high. In January, total credit had increased by only 2.4%.
Historical data on consumer credit from the Fed dates back to the early 1940s.
Revolving credit, which includes credit cards, jumped 20.7% to about $1.1 trillion. The category grew only 4% over the previous month.
Non-revolving credit, such as student or auto loans, rose 8.4% to $3.4 trillion, also outpacing a weaker gain in January.
Americans have faced a rapid pace of price increases everywhere from groceries to gas stations. Year-on-year inflation rose at a pace not seen in 40 years.
Consumer spending has held pace so far, but it’s not immediately clear whether that’s because people are paying more for the same items that have become more expensive or because they’re actually buying more. goods and services.
In late February, Russia’s invasion of Ukraine rocked global energy markets and pushed up gasoline prices. With prices at the pumps rising in March, credit card spending is unlikely to have declined after February’s jump.