WASHINGTON — Credit conditions in the United States are expected to soften over the next six months but remain relatively stable overall, according to the latest Credit Conditions Index released by the American Bankers Associationand reported in the ABA Banking Journal.
The index, based on a quarterly survey of bank economists conducted by the ABA’s Economic Advisory Committee, registered 37.5 in the first quarter of 2026. The survey of economists from major North American banks was conducted March 4.
According to the ABA, readings above 50 indicate that economists expect business and household credit conditions to improve, while readings below 50 signal expectations of deterioration. The latest reading marks the fifth consecutive quarter the index has fallen below the neutral 50 threshold, indicating continued expectations for weakening credit conditions over the next six months. The index was unchanged from the previous quarter.
The ABA Banking Journal reported that economists surveyed by the committee expect real gross domestic product growth to slow and return to its long-term trend through the end of 2027. They estimate a 25% probability of a recession in 2026.
‘Continued Weakness’
“Bankers broadly expect continued weakness in credit conditions over the next six months, but the outlook remains steady and we have not seen further deterioration,” ABA Chief Economist Sayee Srinivasan said in a statement reported by the ABA Banking Journal. “Persistent inflation and subdued labor growth remain headwinds, but economic growth is expected to remain positive.”
Additional Findings
The ABA also reported:
- The headline Credit Conditions Index held steady at 37.5 in the first quarter after improving slightly in the previous quarter. While credit conditions overall are still expected to weaken, economists said improving expectations for business credit were offset by a weaker outlook for consumer credit.
- The Consumer Credit Index declined 1.7 points to 33.3 in the first quarter, marking the second consecutive quarterly drop. Bank economists reported negative expectations for both consumer credit quality and availability and described the outlook for consumer lending as cautious and mixed.
- Meanwhile, the Business Credit Index rose 1.7 points to 41.7 after increasing sharply in the prior quarter. Although the reading remains below 50 — indicating expectations for deterioration — economists said the outlook for both business credit quality and credit availability became less negative during the quarter.
About the Data
The ABA said the Credit Conditions Index is derived from the Economic Advisory Committee’s quarterly outlook for credit markets, which reflects the views of chief economists at many of the largest banks in North America.
