The Federal Reserve’s latest G.19 Consumer Credit Report shows rising trends in consumer credit, excluding loans secured by real estate, through March 2020.

In March, consumer credit decreased at a seasonally adjusted annual rate of 3.4% from the previous month, with revolving debt1 decreasing by 30.9% and nonrevolving debt2 increasing by 6.2 percent. Consumer credit totaled $4.2 trillion on a seasonally adjusted basis, with $1.1 trillion in revolving debt and $3.1 trillion in nonrevolving debt. This is a decrease of $12 billion from the previous month, with revolving debt decreasing by $28.2 billion and non-revolving credit offsetting the decrease by $16.1 billion. The first quarter gains, as a result, were minimal, with total consumer credit increasing by 1.8%.

As can be seen from the above figure, the last time such dramatic monthly decreases were seen was in December 2015. For the first time in seven years following the 2008 financial crisis, the Federal Reserve raised interest rates by 25 basis points from near-zero levels at that time.

The current decline owes to many Americans’ uncertainty in long-term prospects. Nonetheless, as other analyses have shown, American consumers are slightly optimistic about increasing their closed-ended credit (non-revolving credit). Student loan debt increased by $41.4 billion in the first quarter of 2020 on an unadjusted basis, reflecting Americans’ increased interest in education. A similar increase was also seen during the Great Recession, as job scarcity prompted many individuals to go back to school to bolster their credentials.