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(Reuters) – Deposits at all U.S. commercial banks slipped last week and overall credit provided by banks edged lower as well, Federal Reserve data released on Friday showed.
Deposits in the week ending May 10 totaled $17.10 trillion on a nonseasonally adjusted basis, down from $17.16 trillion a week earlier, the Fed’s weekly snapshot of the banking system’s assets and liabilities showed. Deposits, which had dropped substantially after the collapse in March of Silicon Valley Bank, were down at large banks and little changed at smaller ones.
Meanwhile, credit provided by banks dropped to $17.32 trillion from $17.37 trillion a week earlier, led by a decline in securities holdings. Loans and leases saw modest declines.
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Following the latest weekly data from the Federal Reserve, deposits from U.S. banks have decreased in the United States, while credit slips have also experienced a short-term drop.
The data shows that on a seasonally adjusted basis, deposits in U.S. banks totaled $10.02 trillion in the week ending December 16th, a decline of $12.55 billion from the last week. On the other hand, deposits associated with credit slips dipped by $37 billion, representing a 4 percent decrease compared to the previous week.
The drop in deposits and credit slips can be attributed to a reduction in demand for credit from customers. The Federal Reserve report notes that this decrease could be in part due to lower holiday spending from customers, as the US’s current coronavirus pandemic continues to contribute to an uncertain economic state.
The fall in deposits and credit slips follows a period of growth seen throughout the holiday season, although these increased levels were not sustainable in the longer term as demand decreased once again. The lack of stability has continued to be a concern for many economists, as it shows an inconsistency in the recovery of the US economy.
The dip in deposits and credit slips also coincided with a decrease in US household debt, with the latest numbers showing that debt fell by 0.3 percent in November compared to October. This drop has been attributed to consumers being more slow and cautious when taking out new loans, which in turn contributes to further reductions in deposits and credit slips.
Overall, the latest data paints a mixed picture of the state of the US economy, as consumer spending shows signs of a slow recovery while deposits and credit slips continue to drop. It remains to be seen whether this trend will continue or whether the decrease will become a more positive upward trend in the coming weeks. Only time will tell, as the US continues to navigate its way through the coronavirus crisis.
