ABA Report: Business, Consumer Credit Markets Expected to Continue Improving

Top economists from the largest U.S. banks expect credit conditions to continue improving for both consumers and businesses over the next six months, according to ABA’s Credit Conditions Outlook released today.

The report highlights the results of the ABA Credit Conditions Index and summarizes a suite of indexes derived from the quarterly outlook for credit markets produced by ABA’s Economic Advisory Committee. According to the first quarter 2022 report, near-term expectations for credit quality and availability eased modestly for consumers and businesses in January after a more pronounced decline in October.

As the economy continues to normalize the report found that the anticipated pace of improvement is expected to slow relative to the rapid recovery experienced in preceding quarters. The headline credit index fell 2.7 points to 63.6; the consumer credit index declined 2.7 points to 64.6; and the business credit index declined 2.9 points to 62.5.

“Inflationary pressures, the omicron surge, continuing supply chain constraints and expectations for higher interest rates have clouded the near-term economic outlook,” said ABA Chief Economist Sayee Srinivasan. “However, overall credit conditions remain sound, and both consumers and businesses are well-positioned to drive economic growth this year.”