U.S. Consumer Credit Growth Slips in July
by:Tom Moeller
|in:Economy in Brief
Summary
- 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.
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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