Data gathered by Learnbonds.com indicates that the United States commercial and Industrial loans hit $3.04 trillion in the third week of May. According to the data, this is the highest amount since January 1973 when the figure was $134.04 billion.
Coronavirus leads to high commercial loans
A notable spike in the loans by all the commercial loans was recorded in the second week of March 2020 when the amount stood at $2.38 trillion. Eight weeks from this period, the loans grew by 27.86% to the May figure.
Between the first week of this year and May, the loan amount has grown by 29.6% after standing at $2.35 trillion in January. The lowest amount in commercial loans was in the first week of 1973 at $134.04 billion. The loan amount first hit the one trillion mark in the last week of September 2005 when the figure stood at $1.001 trillion.
Before the current high of $3.04 trillion, the last time commercial loans were notably high was in the fourth week of November 2008 when the number stood at $1.57 trillion. Another high was in the third week of January 2001 at $1.09 trillion.
Based on the data, it clear that spike was recorded when the Coronavirus pandemic began impacting the economy.
The report said, “In the United States commercial loans spiked at a period when the impact of coronavirus was being felt on the economy. Many businesses sought to bulk up on cash or replace lost revenue. The money was channeled towards keeping employees on a payroll. Most of the businesses have been forced to fire or send some employees on unpaid leave.”
Based on the monthly percentage change in commercial loans, March and April this record the highest rate at 169.3%. Before the 2020 spike, the last highest rate was between December 1951 and January 1952 at 68.3%. Another notable high was in February 1973, April 1974, October 2008 at 47.5%, 43.7%, and 41.8% respectively.
On the other hand, the lowest percentage difference was recorded between June and July 2009 at 33.7%. Another notable low was in November and December 1953 at 34.3%.