According to the Federal Reserve:
Consumer credit increased at an annual rate of 3-3/4 percent in February 2011. Nonrevolving credit increased at an annual rate of 7-3/4 percent, while revolving credit decreased at an annual rate of 4 percent.
Econintersect analysis of the unadjusted data says the Fed’s seasonal adjustment factors are likely lacking. Overall consumer credit remains in a downtrend.
The red line in the above graph removes the government as one of the lending institutions. Even comparing the blue line which is all credit – it still optically looks like credit is not increasing (although seasonally credit falls in February’s).
Comparing YoY change, consumer credit overall is contracting – however this contraction is trending smaller. Government lending is growing at the rate of approximately $100 billion per year thanks to student loans according to OMB studies which account for most of this growth.
Last month, Econintersect pointed out that Professor Paul Krugman is arguing “if we want a society of broadly shared prosperity, education isn’t the answer” (analysis here). The Federal Reserve’s headline uses seasonally adjusted data. The majority of revolving credit is from credit cards, while non-revolving credit includes automobile loans and all other loans not included in revolving credit, such as loans for mobile homes, education, boats, trailers, or vacations.
Snake Oil, Paul Krugman, Student Loans & Consumer Credit by Steven Hansen