Since the beginning of 2024 (first 1.5 months to Feb 14 inclusive), there has been a decrease of $70 billion or 0.6% compared to December 2023.
Total Bank Credit Growth
For 2023, total bank credit in U.S. banks grew by 2.2%, amounting to $270 billion, compared to growth of 11.4% in 2022, 4.2% in 2021, and a historical average rate of 5.4% from December 2011 to December 2019.
By loan type, the dynamics are as follows:
Commercial credit to nonfinancial firms in early 2024 continues to decline by 0.2% year-on-year compared to December 2023. For all of 2023, credit declined by 1.5% year-on-year compared to the record 13.1% growth in 2022, a 3.9% contraction in 2021, and an average annualized growth rate of 7.7% year-on-year from December 2011 to December 2019.
Mortgage lending is up by 0.26% in early 2024, rising by 3.5% in 2023, 11.5% in 2022, 3.5% in 2021, and averaging 3.6% from 2012 to 2019.
Commercial real estate is surprisingly up by 0.6% in early 2024, with a 3.5% increase in 2023, a 13.3% increase in 2022, and a 3% increase in 2021, averaging a positive 6.4% from 2012 to 2019.
Consumer credit declined sharply by 1.9% in early 2024. It's important to note that this is a seasonal trend, as there is usually a contraction in consumer credit in January - February.
Comparison with Historical Data
For all of 2023, the 1.4% growth in the first 1.5 months of 2024 completely neutralized the credit growth in 2023. There was a record growth of 10.8% in 2022, and 8.8% in 2021, and the historical average for 2012 - 2019 is 5%.
Other lending (including margin lending in financial markets) declined by 1.9% in early 2024, with growth of 1.4% in 2023, 9.4% in 2022, and an average of a positive 9.2% per year from 2012 through 2019.
Conclusion
The downward trend in lending rates began in March 2023, while from August 2021 through February 2023, lending across all loan types grew by $1.7 trillion or 16.5%.
Typically, near-zero lending rates in the U.S. have been accompanied by a recession and a contraction in lending due to a crisis.