Nonrevolving credit, which as the Fed notes, "includes automobile loans and all other loans not included in revolving credit, such as loans for mobile homes, education, boats, trailers, or vacations," increased by 5.3 percent.
After declining from January 2009 to May 2010, nonrevolving credit has expanded in 11 of the last 12 months, and for nine straight months.
Bloomberg News reported, "The increase in borrowing from commercial banks and credit unions in April probably reflected growing demand for autos that has since dropped off as fuel prices climbed."
Others highlighted the impact that the bad economy has had on borrowing for education. Reuters noted: "‘What appears to be a turnaround in the credit cycle is mostly an increase in student loan debt as people go back to school to improve skills amid high unemployment and as state budget cuts push up tuition,' Wells Fargo Securities said."
In terms of revolving credit - mainly credit cards - the falloff has been deeper and it has persisted. Revolving credit declined by 1.4 percent in April. That was the third decline out of the first four months of 2011, with revolving credit falling in 30 of the past 32 months.
In April 2011, consumer credit outstanding (seasonally adjusted) had fallen to roughly the same level it was at in August 2004.
The main story here is that consumers continue to lack confidence, and therefore, are keeping a tight rein on spending and are reducing outstanding credit card debt. This is not surprising given the underperforming recovery, including very poor job creation.
And until the public policy agenda shifts in a pro-growth direction - including lower tax rates, less regulation, free trade, smaller government, and sound money - a lackluster, uneven recovery will persist.
Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.