The lending market has seen a significant decrease in activity year-over-year, but recent data shows that May lending activity has increased from April. This is a sign that the market is beginning to recover from the economic downturn caused by the COVID-19 pandemic.
According to the latest data from the Federal Reserve, total consumer credit increased by $14.8 billion in May, which is a significant increase from the $2.1 billion increase seen in April. This increase was driven by a $13.9 billion increase in non-revolving credit, which includes auto loans and student loans. Revolving credit, which includes credit cards, also increased by $0.9 billion.
Despite the increase in May lending activity, it is still significantly lower than it was a year ago. Total consumer credit decreased by $99.3 billion in May 2020 compared to May 2019, with non-revolving credit decreasing by $99.4 billion and revolving credit decreasing by $0.1 billion.
The decrease in consumer credit is largely due to the economic downturn caused by the COVID-19 pandemic. Many businesses have had to close or reduce their operations, leading to job losses and reduced income for many people. This has caused many people to reduce their borrowing and spending, resulting in the decrease in consumer credit.
However, the increase in May lending activity is a sign that the market is beginning to recover from the economic downturn. As more businesses reopen and people start to return to work, it is likely that consumer credit will continue to increase in the coming months. This could help to stimulate the economy and lead to an overall recovery.
Overall, May lending activity has increased from April but is still significantly down year-over-year due to the economic downturn caused by the COVID-19 pandemic. However, the increase in May lending activity is a sign that the market is beginning to recover and could lead to an overall economic recovery in the coming months.