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Economy in Brief

U.S. Consumer Credit Growth Slips in July
by Tom Moeller  September 8, 2022

• Annual growth remains strongest in twenty years.

• Revolving credit usage strongest since 1996.

• Nonrevolving credit growth remains firm.

Consumer credit outstanding increased $23.8 billion (7.7% y/y) in July after rising $39.1 billion in June, revised from $40.1 billion. A $32.0 billion rise had been expected in the Action Economics Forecast Survey. The ratio of consumer credit outstanding-to-disposable personal income rose to 24.9% in July from 24.8% in June. It was the highest percentage since March 2020.

Nonrevolving consumer credit balances rose $12.9 billion (5.7% y/y) after increasing a record $23.5 billion in June (revised from $25.3 billion). Federal government lending, which represented 41.7% of nonrevolving credit, rose 3.2% y/y, the same rate as in June. Nonrevolving loans provided by depository institutions (26.4% of credit) grew 8.8% y/y, easing from April's 10.5% y/y pace. Finance company lending (16.0% of loans) rose 0.6% y/y, down from 5.5% growth last year. Growth of credit union nonrevolving loans (14.9% of the total) accelerated to 14.8% y/y in July from 5.5% y/y in 2021.

Revolving consumer cred it balances rose $10.9 billion (14.3% y/y) after increasing $15.5 billion in June, revised from $14.8 billion. Revolving credit provided by depository institutions (90.9% of the total and mostly credit card debt) rose 15.9% y/y, the quickest growth since January 1997. Borrowing from credit unions (6.3% of the total) increased 13.0% y/y, up from 3.8% growth last year. Nonfinancial business loans (1.7% of the total) were unchanged in July from a year ago. The value of finance company loans (1.1% of loans) fell 20.1% y/y in July, about the same as last year.

The value of student loans outstanding during Q2'22 rose a diminished 1.7% y/y to $1.748 trillion. The value of motor vehicle loans outstanding rose 7.0% y/y to $1.364 trillion.

These Federal Reserve Board figures are break-adjusted and calculated by Haver Analytics. The breaks in the series in 2005, 2010 and 2015 are the result of the incorporation of the Census and Survey of Finance Companies, as well as changes in the seasonal adjustment methodology. The consumer credit data are available in Haver's USECON database. The Action Economics figures are contained in the AS1REPNA database.

Wage Growth When Inflation Is High from the Federal Reserve Bank of San Francisco can be found here.

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